QUESTION 13 Why the horizontal mergers are more carefully scrutinized by regulatory authorities, when compared to the conglomerate mergers? O Because horizontal mergers can be more directly associated to monopolistic practices O Because horizontal mergers can be more directly associated to tax evasion Because horizontal mergers are guided by game theory Because horizontal mergers are a previous step in performing conglomerate mergers
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- which of the following does not explain the poor performance of mergers and acquisitions ? i. Managers inaccurately value a target firm beacuse they believe the target firm is undervalued. ii. Mergers benefit may be underestimated iii. Managers mayhave priorities other than the interest of the shareholders a. II only b. III only c. I only d. e. II and III onlyWhy might one company have to complete more due diligence than another in a merger? A. None of these answers B. It is important for a company to know what it is buying C. Acquisitions can be risky D. If there is a large size discrepancy the merger seems more like an aquisQUESTION 40 Henry Manne notes that a policy making it easy to fight off hostile takeovers would dilute: A. The ability of new shareholders to enter the investment B. The market for corporate control C. The power of free-flowing capital D. The stock options of high-level executives E. Congressional insider trading
- Which of the following is NOT normally regarded as being a barrier to hostile takeovers? (Points : 5) Abnormally high executive compensation Targeted share repurchases Shareholder rights provisions Restricted voting rights Poison pillsAcquisitions (or the threat thereof) can help to foster better corporate governance. Question 5 options: True FalseMI P. 4112 WINICit of the vilowing statements... Which of the following statements best describes the tipper/tippee theory? Multiple Choice This theory outlines the rules for limiting shareholders' ability to bring class action suits against nationally traded corporations. This theory holds that if an individual wrongfully acquires and uses inside information for trading for his or her personal gain, he or she is liable for insider trading. This theory states that small investors have a low-risk tolerance and tend not to hold a stock for the long term. This theory holds that any individual who acquires material inside information as a result of an insider's breach of duty has engaged in insider trading. APR 27 2 Second create at least one different recoarch questions rave O
- A6) Finance What are different Anti Merger strategies available to management of firm?Managerial motives for mergers and acquisitions do not relate to Select one: a. Dividends O b. Job security Power C. d. Emoluments[S1] A proxy fight involves having shareholders looking for board members that will allow an acquisition. [S2] A tender offer can be made with or without plans for an acquisitiona. Only S2 is true.b. Both are true.c. Only S1 is true.d. Neither is true.
- Diversification is considered a dubious reason for merger because:Select one: a. Risk reduction is achieved by more by bondholders than stockholders b. Personal diversification is possible by the shareholders themselves c. Diversification only minimizes unsystematic risk d. All of the aboveWhich of the following statements is CORRECT? a. Most business in the U.S. is conducted by corporations, and corporations' popularity results primarily from their favorable tax treatment. b. Corporations and partnerships have an advantage over proprietorships because a proprietor is exposed to unlimited liability, but the liability of all investors in the other types of businesses is more limited. c. Conflicts can exist between stockholders and managers, but potential conflicts are reduced by the possibility of hostile takeovers. d. A good goal for a firm's management is the maximization of expected EPS. e. For a stock to be in equilibrium, its intrinsic value must be greater than the actual market price.Which is not a valid, acceptable reason for companies to merge? Synergistic benefits arising from mergers. Reduction in competition resulting from mergers. Acquisition of assets at below replacement value. Attempts to minimize taxes by acquiring a firm with large accumulated losses that can be used immediately. Using surplus cash to acquire another firm and prevent unfavorable tax consequences for shareholders.