Question 1

Exaggerated managerial self-confidence that may result in an overestimation of the value of a potential acquisition is referred to as ________.

Accepted Answer

A)  synergy 
B)  overconfidence 
C)  hubris 
D)  effrontery 
A)  synergy 
B)  overconfidence 
C)  hubris 
D)  effrontery

Question 2

Sometimes a supplier cannot or will not make an investment that is specific to an exchange with one buyer.

Accepted Answer

A) True 
 B)False

Question 3

Acquisitions are common in industries in which technology advances slowly and methodically.

Accepted Answer

A) True 
 B)False

Question 4

An acquisition ensures that a firm enters a new business with viable competitive strength.

Accepted Answer

A) True 
 B)False

Question 5

Escalation of commitment can lead to an overestimation of the value believed to be derived from the acquisition.

Accepted Answer

A) True 
 B)False

Question 6

________ is calculated by multiplying the number of shares outstanding by their market price.

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 7

What are the three typical categories of motives behind most mergers and acquisitions?

Accepted Answer

The motives behind mergers and

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

Serial acquirers are companies that engage in frequent acquisitions.

Accepted Answer

A) True 
 B)False

Question 10

When ________ is kept in check, acquiring firms are more likely to realize synergies from a merger or acquisition.

Accepted Answer

A)  attrition 
B)  performance 
C)  managerialism 
D)  materialism 
A)  attrition 
B)  performance 
C)  managerialism 
D)  materialism

Question 11

In investor/holding company transactions, independent investors or holding companies purchase existing firms.

Accepted Answer

A) True 
 B)False

Question 12

As a firm increases in size, shareholder wealth automatically increases as well.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an advantage of acquisitions over internal development?

Accepted Answer

A)  Entry by acquisition may foster a more competitive environment. 
B)  Acquisitions provide access to inadequate assets. 
C)  Acquisitions are faster than internal development. 
D)  Acquisitions provide minimum efficient scale for cost purposes. 
A)  Entry by acquisition may foster a more competitive environment. 
B)  Acquisitions provide access to inadequate assets. 
C)  Acquisitions are faster than internal development. 
D)  Acquisitions provide minimum efficient scale for cost purposes.

Question 14

If the combined resources and capabilities resulting from a merger or acquisition are complementary, the competitive advantage is usually short term in nature.

Accepted Answer

A) True 
 B)False

Question 15

The amount of merger and acquisition activity is determined largely by the industry development phase.

Accepted Answer

A) True 
 B)False

Question 16

Internal development is typically more expensive than acquisitions.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Most of the motives behind mergers and acquisitions reflect shareholders' best interests.

Accepted Answer

A) True 
 B)False

Question 19

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 20

When integrating acquisitions, most managers tend to focus on personnel issues.

Accepted Answer

A) True 
 B)False

Exaggerated managerial self-confidence that may result in an overestimation of the value of a potential acquisition is referred to as ________.

Sometimes a supplier cannot or will not make an investment that is specific to an exchange with one buyer.

Acquisitions are common in industries in which technology advances slowly and methodically.

An acquisition ensures that a firm enters a new business with viable competitive strength.

Escalation of commitment can lead to an overestimation of the value believed to be derived from the acquisition.

________ is calculated by multiplying the number of shares outstanding by their market price.

What are the three typical categories of motives behind most mergers and acquisitions?

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

Serial acquirers are companies that engage in frequent acquisitions.

When ________ is kept in check, acquiring firms are more likely to realize synergies from a merger or acquisition.

In investor/holding company transactions, independent investors or holding companies purchase existing firms.

As a firm increases in size, shareholder wealth automatically increases as well.

Which of the following is an advantage of acquisitions over internal development?

If the combined resources and capabilities resulting from a merger or acquisition are complementary, the competitive advantage is usually short term in nature.

The amount of merger and acquisition activity is determined largely by the industry development phase.

Internal development is typically more expensive than acquisitions.

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

Most of the motives behind mergers and acquisitions reflect shareholders' best interests.

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

When integrating acquisitions, most managers tend to focus on personnel issues.

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

Exaggerated managerial self-confidence that may result in an overestimation of the value of a potential acquisition is referred to as ________.

Sometimes a supplier cannot or will not make an investment that is specific to an exchange with one buyer.

Acquisitions are common in industries in which technology advances slowly and methodically.

An acquisition ensures that a firm enters a new business with viable competitive strength.

Escalation of commitment can lead to an overestimation of the value believed to be derived from the acquisition.

________ is calculated by multiplying the number of shares outstanding by their market price.

What are the three typical categories of motives behind most mergers and acquisitions?

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

Serial acquirers are companies that engage in frequent acquisitions.

When ________ is kept in check, acquiring firms are more likely to realize synergies from a merger or acquisition.

In investor/holding company transactions, independent investors or holding companies purchase existing firms.

As a firm increases in size, shareholder wealth automatically increases as well.

Which of the following is an advantage of acquisitions over internal development?

If the combined resources and capabilities resulting from a merger or acquisition are complementary, the competitive advantage is usually short term in nature.

The amount of merger and acquisition activity is determined largely by the industry development phase.

Internal development is typically more expensive than acquisitions.

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

Most of the motives behind mergers and acquisitions reflect shareholders' best interests.

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

When integrating acquisitions, most managers tend to focus on personnel issues.

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