Question 1

What is the difference between intrinsic and market values?

Accepted Answer

Intrinsic value is the present value of

Question 2

Price competition increases when rivalry is reduced.

Accepted Answer

A) True 
 B)False

Question 3

A merger is the consolidation of one firm with another.

Accepted Answer

A) True 
 B)False

Question 4

Business-strategy alliances are fundamentally related to a firm's core business through ________.

Accepted Answer

A)  vertical relationships 
B)  horizontal relationships 
C)  complementary relationships 
D)  all of the above 
A)  vertical relationships 
B)  horizontal relationships 
C)  complementary relationships 
D)  all of the above

Question 5

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 6

One of the primary advantages of internal development over acquisitions is speed.

Accepted Answer

A) True 
 B)False

Question 7

The tendency of managers to make decisions based on personal self-interest rather than the best interests of shareholders is referred to as ________.

Accepted Answer

A)  managerial self-interest 
B)  managerial selfishness 
C)  egoism 
D)  managerialism 
A)  managerial self-interest 
B)  managerial selfishness 
C)  egoism 
D)  managerialism

Question 8

The final price actually paid to target shareholders of an acquired company is called the ________.

Accepted Answer

A)  intrinsic price 
B)  purchase price 
C)  market value 
D)  present value 
A)  intrinsic price 
B)  purchase price 
C)  market value 
D)  present value

Question 9

Strategy is important to every firm, but the Internet changes quarterly, which elevates strategy to a mission-critical task.

Accepted Answer

A) True 
 B)False

Question 10

After PayPal was acquired by eBay, it became the de facto payment standard on the biggest locus of small business in the world.

Accepted Answer

A) True 
 B)False

Question 11

Explain the five factors that can affect the attractiveness of acquisitions as strategy vehicles.

Accepted Answer

Many factors can affect the attractivene

Question 12

What are some of the benefits of acquisition over internal development?

Accepted Answer

One of the primary advantages of acquisi

Question 13

Explain the three categories of typical motives behind mergers and acquisitions.

Accepted Answer

The motives behind M&As fall into three

Question 14

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?
 $$\begin{array} { | l | l | l | l | } 
\hline \begin{array} { c } 
\text { Years until syuergies } \
\text { are inuplemeuted }
\end{array} & \text { Cost of capital } & & \
\hline & 10 \% & 15 \% & 20 \% \
\hline 0 & 0.100 & 0.150 & 0.200 \
\hline 1 & 0.110 & 0.173 & 0.240 \
\hline 2& 0.121 & 0.198 & 0.288 \
\hline 3 & 0.133 & 0.228 & 0.346 \
\hline 4 & 0.146 & 0.262 & 0.415 \
\hline5& 0.161 & 0.302 & 0.498 \
\hline
\end{array}$$

Accepted Answer

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

Question 15

Many acquisitions fail during the integration stage.

Accepted Answer

A) True 
 B)False

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

Managers may make acquisitions in order to increase earnings by diversifying the firm's revenue stream.

Accepted Answer

A) True 
 B)False

Question 18

What are some of the drawbacks of acquisition over internal development?

Accepted Answer

Firms may find it preferable for several

Question 19

________ is/are the most common synergy and the easiest to estimate.

Accepted Answer

A)  Financial engineering 
B)  Sharing capabilities 
C)  Market access 
D)  Cost savings 
A)  Financial engineering 
B)  Sharing capabilities 
C)  Market access 
D)  Cost savings

Question 20

What is the basic difference between mergers and acquisitions?

Accepted Answer

Mergers are the consolidation

What is the difference between intrinsic and market values?

Price competition increases when rivalry is reduced.

A merger is the consolidation of one firm with another.

Business-strategy alliances are fundamentally related to a firm's core business through ________.

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

One of the primary advantages of internal development over acquisitions is speed.

The tendency of managers to make decisions based on personal self-interest rather than the best interests of shareholders is referred to as ________.

The final price actually paid to target shareholders of an acquired company is called the ________.

Strategy is important to every firm, but the Internet changes quarterly, which elevates strategy to a mission-critical task.

After PayPal was acquired by eBay, it became the de facto payment standard on the biggest locus of small business in the world.

Explain the five factors that can affect the attractiveness of acquisitions as strategy vehicles.

What are some of the benefits of acquisition over internal development?

Explain the three categories of typical motives behind mergers and acquisitions.

Many acquisitions fail during the integration stage.

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

Managers may make acquisitions in order to increase earnings by diversifying the firm's revenue stream.

What are some of the drawbacks of acquisition over internal development?

________ is/are the most common synergy and the easiest to estimate.

What is the basic difference between mergers and acquisitions?

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

What is the difference between intrinsic and market values?

Price competition increases when rivalry is reduced.

A merger is the consolidation of one firm with another.

Business-strategy alliances are fundamentally related to a firm's core business through ________.

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

One of the primary advantages of internal development over acquisitions is speed.

The tendency of managers to make decisions based on personal self-interest rather than the best interests of shareholders is referred to as ________.

The final price actually paid to target shareholders of an acquired company is called the ________.

Strategy is important to every firm, but the Internet changes quarterly, which elevates strategy to a mission-critical task.

After PayPal was acquired by eBay, it became the de facto payment standard on the biggest locus of small business in the world.

Explain the five factors that can affect the attractiveness of acquisitions as strategy vehicles.

What are some of the benefits of acquisition over internal development?

Explain the three categories of typical motives behind mergers and acquisitions.

Many acquisitions fail during the integration stage.

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

Managers may make acquisitions in order to increase earnings by diversifying the firm's revenue stream.

What are some of the drawbacks of acquisition over internal development?

________ is/are the most common synergy and the easiest to estimate.

What is the basic difference between mergers and acquisitions?

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