Question 1

Cultural clashes can facilitate the integration of two firms.

Accepted Answer

A) True 
 B)False

Question 2

All of the following are points that must be kept in mind when considering an acquisition except ________.

Accepted Answer

A)  managers need to be clear about the economic logic 
B)  managers need to understand and promote managerialism 
C)  managers need to consider alternatives to the acquisition 
D)  managers need to know how to navigate hazards that may ruin the project 
A)  managers need to be clear about the economic logic 
B)  managers need to understand and promote managerialism 
C)  managers need to consider alternatives to the acquisition 
D)  managers need to know how to navigate hazards that may ruin the project

Question 3

Synergy value is a function of the strategic fit of the acquiring and the target firms.

Accepted Answer

A) True 
 B)False

Question 4

Price competition increases when rivalry is reduced.

Accepted Answer

A) True 
 B)False

Question 5

Why is there no single correct price for an acquisition or merger?

Accepted Answer

There's no single correct price for an a

Question 6

Internal development is typically more expensive than acquisitions.

Accepted Answer

A) True 
 B)False

Question 7

All of the following are basic issues relating to the potential success of mergers and acquisitions except ________.

Accepted Answer

A)  pricing 
B)  premiums 
C)  walk-away price 
D)  convergence 
A)  pricing 
B)  premiums 
C)  walk-away price 
D)  convergence

Question 8

What type of objectives should a firm entering the international arena by the acquisition vehicle have?

Accepted Answer

The use of acquisitions as a strategy ve

Question 9

Upstream acquisitions are acquisitions that result when companies buy some of their customers.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not one of the basic types of merger and acquisition transactions?

Accepted Answer

A)  integration 
B)  absorption 
C)  holding 
D)  preservation 
A)  integration 
B)  absorption 
C)  holding 
D)  preservation

Question 11

In an overcapacity acquisition, the objectives include ________.

Accepted Answer

A)  short cut innovation by buying it from small companies 
B)  synergy of similar but expanded product lines or geographic markets 
C)  eliminating capacity, gaining market share, and increasing efficiency 
D)  anticipation of new industry emerging and culling resources from firms in multiple industries whose boundaries are eroding 
A)  short cut innovation by buying it from small companies 
B)  synergy of similar but expanded product lines or geographic markets 
C)  eliminating capacity, gaining market share, and increasing efficiency 
D)  anticipation of new industry emerging and culling resources from firms in multiple industries whose boundaries are eroding

Question 12

Integration problems can arise during the idea generation and justification stages.

Accepted Answer

A) True 
 B)False

Question 13

To what extent should the target firm and acquiring firm remain strategically independent?

Accepted Answer

It depends on the types of resource shar

Question 14

Firms have market power when they can influence ________.

Accepted Answer

A)  competition 
B)  prices 
C)  sourcing 
D)  mergers 
A)  competition 
B)  prices 
C)  sourcing 
D)  mergers

Question 15

Use the table below to answer the following question. What would be the required synergy given a premium of $250,000,000 if the company thinks that it will take two years to implement the synergies, and if the cost of capital is 15 percent? What does this number mean?
 $$\begin{array} { | l | l | l | l | } 
\hline \begin{array} { c } 
\text { Years until syuergies } \
\text { are inuplemented }
\end{array} & \text { Cost of capital } & & \
\hline & 10 \% & 15 \% & 20 \% \
\hline 0 & 0.100 & 0.150 & 0.200 \
\hline 1 & 0.110 & 0.173 & 0.240 \
\hline 2 & 0.121 & 0.198 & 0.288 \
\hline 3 & 0.133 & 0.228 & 0.346 \
\hline 4 & 0.146 & 0.262 & 0.415 \
\hline 5& 0.161 & 0.302 & 0.498 \
\hline
\end{array}$$

Accepted Answer

With a premium of $250,000,000, an estim

Question 16

The present value of a company's future cash flows from existing assets and businesses is referred to as ________.

Accepted Answer

A)  intrinsic value 
B)  current value 
C)  market value 
D)  present value 
A)  intrinsic value 
B)  current value 
C)  market value 
D)  present value

Question 17

Through acquisition, the buyer firm eliminates a competitor that would otherwise remain in the market.

Accepted Answer

A) True 
 B)False

Question 18

The purchase price is almost always greater than current market value.

Accepted Answer

A) True 
 B)False

Question 19

In a ________ acquisition, the acquiring company expands its product line by purchasing another company.

Accepted Answer

A)  horizontal 
B)  vertical 
C)  product-extension 
D)  market-extension 
A)  horizontal 
B)  vertical 
C)  product-extension 
D)  market-extension

Question 20

What is the rationale behind a roll-up strategy?

Accepted Answer

Basically it's that a large regional or

Cultural clashes can facilitate the integration of two firms.

All of the following are points that must be kept in mind when considering an acquisition except ________.

Synergy value is a function of the strategic fit of the acquiring and the target firms.

Price competition increases when rivalry is reduced.

Why is there no single correct price for an acquisition or merger?

Internal development is typically more expensive than acquisitions.

All of the following are basic issues relating to the potential success of mergers and acquisitions except ________.

What type of objectives should a firm entering the international arena by the acquisition vehicle have?

Upstream acquisitions are acquisitions that result when companies buy some of their customers.

Which of the following is not one of the basic types of merger and acquisition transactions?

In an overcapacity acquisition, the objectives include ________.

Integration problems can arise during the idea generation and justification stages.

To what extent should the target firm and acquiring firm remain strategically independent?

Firms have market power when they can influence ________.

The present value of a company's future cash flows from existing assets and businesses is referred to as ________.

Through acquisition, the buyer firm eliminates a competitor that would otherwise remain in the market.

The purchase price is almost always greater than current market value.

In a ________ acquisition, the acquiring company expands its product line by purchasing another company.

What is the rationale behind a roll-up strategy?

Introducing Strategic Management

Leading Strategically Through Effective Vision and Mission

Examining the Internal Environment: Resources

Exploring the External Environment: Macro Industry and Dynamics

Creating Business Strategies

Crafting Business Strategy of Dynamic Contexts

Developing Corporate Strategy

Looking at International Strategies

Understanding Alliances and Cooperative Strategies

Organizational Structure, Systems, and Processes

Considering New Ventures and Corporate Renewal

Corporate Governance in the Twenty-First Century

Filters

Exam 10: Studying Merges and Acquisitions

Cultural clashes can facilitate the integration of two firms.

All of the following are points that must be kept in mind when considering an acquisition except ________.

Synergy value is a function of the strategic fit of the acquiring and the target firms.

Price competition increases when rivalry is reduced.

Why is there no single correct price for an acquisition or merger?

Internal development is typically more expensive than acquisitions.

All of the following are basic issues relating to the potential success of mergers and acquisitions except ________.

What type of objectives should a firm entering the international arena by the acquisition vehicle have?

Upstream acquisitions are acquisitions that result when companies buy some of their customers.

Which of the following is not one of the basic types of merger and acquisition transactions?

In an overcapacity acquisition, the objectives include ________.

Integration problems can arise during the idea generation and justification stages.

To what extent should the target firm and acquiring firm remain strategically independent?

Firms have market power when they can influence ________.

The present value of a company's future cash flows from existing assets and businesses is referred to as ________.

Through acquisition, the buyer firm eliminates a competitor that would otherwise remain in the market.

The purchase price is almost always greater than current market value.

In a ________ acquisition, the acquiring company expands its product line by purchasing another company.

What is the rationale behind a roll-up strategy?

Introducing Strategic Management

Leading Strategically Through Effective Vision and Mission

Examining the Internal Environment: Resources

Exploring the External Environment: Macro Industry and Dynamics

Creating Business Strategies

Crafting Business Strategy of Dynamic Contexts

Developing Corporate Strategy

Looking at International Strategies

Understanding Alliances and Cooperative Strategies

Organizational Structure, Systems, and Processes

Considering New Ventures and Corporate Renewal

Corporate Governance in the Twenty-First Century

Filters