Quiz
Chapter 10 - Mergers and Acquisitions
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Fragen in diesem Quiz (48)
1A firm engages in a(n) ________ when it purchases a second firm.
- Aacquisition
- Bjoint venture
- Cstrategic alliance
- Dequity alliance
2When one firm acquires a(n) ________ of another firm, it has acquired enough of that firm's assets so that the acquiring firm is able to make all the management and strategic decisions in the target firm.
- Amarket stake
- Bequity share
- Ccontrolling share
- Dequity stake
3A(n) ________ acquisition occurs when the management of a target firm wants to be acquired.
- Ahostile
- Badmirable
- Cstrategic
- Dfriendly
4When a firm has not sold shares on the public stock market, it is known as
- Aclosely held.
- Bprivately held.
- Cpublicly traded.
- Da small cap stock.
5The difference between the current market price of a target firm's shares and the price a potential acquirer offers to pay for those shares is known as an
- Aacquisition premium.
- Bacquisition discount.
- Cacquisition margin.
- Dacquisition price.
6When Sears and Kmart, two retail firms of relatively equal size in the United States, agreed to combine their assets, this was an example of a(n)
- Ajoint venture.
- Bacquisition.
- Cmerger.
- Dequity agreement.
7The price of each of a firm's shares multiplied by the number of shares outstanding represents the firm's
- Atotal equity base.
- Bcurrent market value.
- Ctotal market share.
- Dcurrent market share.
8In an unrelated acquisition, if 5 firms are interested in acquiring a firm and each of the bidding firms had a current market value of $30,000 while the current market value of the target firm is $20,000, this acquisition is likely to generate economic profits of ________ for the acquiring firm.
- A$10,000
- B$20,000
- C$50,000
- D$0.00
9If an electronics manufacturer were to acquire a chain of retail electronic stores to sell its products, this would be an example of a ________ merger.
- Avertical
- Bhorizontal
- Cmarket extension
- Dproduct extension
10If eBay were to acquire a smaller online auction company, this would be an example of a ________ merger.
- Aconglomerate
- Bvertical
- Cmarket extension
- Dhorizontal
11In a ________ merger, firms acquire complementary products through their merger and acquisition activities.
- Avertical
- Bmarket extension
- Cproduct extension
- Dhorizontal
12When eBay acquired Baaze.com, an Indian auction firm, in order to enter the Indian online auction market, this was an example of a ________ merger.
- Aproduct extension
- Bmarket extension
- Cconglomerate
- Dvertical
13If there are no vertical, horizontal, product extension, or market extension links between firms, the FTC defines the merger or acquisition activity between firms as a ________ merger.
- Aconglomerate
- Bvertical
- Chorizontal
- Dproduct extension
14________ economies are scale economies that occur when the physical processes inside a firm are altered so that the same amounts of input produce a higher quantity of outputs.
- APecuniary
- BDiversification
- CTechnical
- DVertical
15Which of the following is a source of diversification economies?
- Amarketing
- Bproduction
- Cscheduling
- Dportfolio management
16________ economies are achieved by the ability of firms to dictate prices by exerting market power.
- APecuniary
- BTechnical
- CDiversification
- DProduction
17________ economies are achieved by improving a firm's performance relative to its risk attributes or lowering its risk attributes relative to its performance.
- ATechnical
- BDiversification
- CPecuniary
- DMarket
18Which of the following is a financial motivation for why bidding firms might want to engage in merger and acquisition strategies?
- Ato increase leverage opportunities
- Bto capture economies of scale
- Cto adopt more efficient production or organizational technology
- Dto engage in vertical integration
19Which one of the following is not one of the reasons that Jensen and Ruback listed as to why bidding firms might want to engage in merger and acquisition strategies?
- Ato reduce production or distribution costs
- Bto gain market power in product markets
- Cto expand individual managers' power within an organization
- Dto eliminate inefficient target management
20In a related acquisition, if there is one target firm and ten bidding firms, and the value of each of the bidding firms as a stand-alone entity is $50,000 and the value of the target firm as a stand-alone entity is $30,000, the market value of the combined entity will be
- A$0.00.
- Bless than $80,000.
- Cmore than $80,000.
- D$80,000.
21Wealthy individuals who provide capital to entrepreneurs to help them grow their businesses are known as
- Abusiness angels.
- Bventure capitalists.
- Cstockholders
- DCEOs.
22________ firms typically raise money from numerous smaller investors, which they then invest in a portfolio of entrepreneurial firms.
- ABusiness angel
- BVenture capital
- CClosely held
- DPrivate equity
23In a(n) ________, a firm, typically working with an investment banker, sells its equity to the public at large.
- AFTC
- Bmerger
- CIPO
- Dacquisition
24Entrepreneurs must rely on capital generated from their ongoing operations or ________ and debt capital provided by banks.
- Ainitial public offering
- Bretained earnings
- Cventure capital firms
- Doperating budgets
25Managers of bidding firms continue to engage in merger or acquisition strategies even though they usually do not generate profits for bidding firms in order to
- Aensure survival.
- Bimprove firm reputation.
- Creduce agency problems.
- Dreduce managerial hubris.
26Which of the following actions should bidding firm managers take to help earn superior performance in an acquisition strategy?
- AShare information with other bidders.
- BDelay the closing of the deal.
- CAvoid winning bidding wars.
- DOperate in competitive acquisition markets.
27A thinly traded market is a market where
- Athere are only a small number of buyers and sellers,where information about opportunities in this market is not widely know, and where interests besides purely maximizing the value of a firm can be important.
- Bmany firms are implementing acquisition strategies.
- Cinformation about opportunities in this market is widely known.
- Dthe only important interest is to maximize the value of a firm.
28To ensure that the owners of target firms appropriate whatever value is created by a merger or acquisition, managers in these target firms should
- Acreate a thinly traded market for their firm.
- Bseek information from bidders.
- Cclose the acquisition deal quickly.
- Dlimit the number of bidders involved in the bidding competition.
29________ is (are) a maneuver in which a target firm's management purchases any of the target firm's stock owned by a bidder and does so for a price that is greater than the current market value of that stock.
- AStandstill agreements
- BPoison pills
- CShark repellents
- DGreenmail
30Firms using ________ fend off an acquisition by taking over the firm or firms bidding for them.
- Ashark repellents
- Ba crown jewel sale
- Cthe Pac Man defense
- Da golden parachute
31A ________ is a compensation arrangement between a firm and its senior management team that promises these individuals substantial cash payment if their firm is acquired and they lose their jobs in the process.
- Awhite knight agreement
- Bgreenmail agreement
- Cshark repellent
- Dgolden parachute
32Mergers and acquisitions used to create diversification strategies should be managed through the
- AM-form structure.
- Bfunctional structure.
- CU-form structure.
- Dmatrix structure.
33The most significant challenge in integrating bidding and target firms has to do with
- Aaccounting differences.
- Bcultural differences.
- Coperational differences.
- Dlogistic differences.
34A ________ is another bidding firm that agrees to acquire a particular target in the place of the original bidding firm.
- Agolden parachute
- Bgreenmail
- Cwhite knight
- Dcrown jewel
35________ include a variety of relatively minor corporate governance changes that, in principle, are supposed to make it more difficult to acquire a target firm.
- AShark repellents
- BWhite knights
- CGreenmail
- DPoison pills
36Supermajority voting rules are an example of a
- Apoison pill.
- Bwhite knight.
- Cgolden parachute.
- Dshark repellent.
37________ does not affect the wealth of target firm equity holders.
- ABlue Man defense
- BPac Man defense
- CGolden parachute
- DSilver parachute
38________ is an example of an ineffective and inconsequential response with the idea that sometimes a bidding firm is interested in just a few of the businesses currently being operated by the target firm.
- AA Pac Man defense
- BA Blue Man defense
- CA crown jewel sale
- DA golden parachute defense
39If P&G's bid for Gillette was invited by Gillette's management, this would be an example of a
- Ahostile acquisition.
- Bjoint venture.
- Cfriendly acquisition.
- Dmerger.
40If Gillette's total market value on the day the deal was announced was $48.30 billion, P&G's $57 billion offer would represent a(n)
- A18% acquisition premium.
- B82% acquisition discount.
- C82% acquisition premium.
- D18% acquisition discount.
41Since both P&G and Gillette are consumer products firms, this acquisition is best described as a
- Avertical merger.
- Bhorizontal merger.
- Cmarket extension merger.
- Dconglomerate merger.
42P&G's acquisition of Wella in 2003 is an example of a
- Amarket extension merger.
- Bconglomerate merger.
- Cvertical merger.
- Dproduct extension merger.
43P&G's purchase of AG-Hutchison Ltd in 2004 is an example of a
- Aconglomerate merger.
- Bvertical merger.
- Cmarket extension merger.
- Dconglomerate acquisition.
44If one of the reasons P&G acquired Gillette was to gain greater market power in key industries, this would be an example of ________ economies.
- Atechnical
- Bpecuniary
- Cdiversification
- Dvertical
45If P&G wanted to increase the probability that it would be able to earn superior economic performance from its acquisition of Gillette, P&G should
- Ashare information about Gillette with other potential bidders.
- Bshare information about strategic fit potential between P&G and Gillette with Gillette.
- Cwait to submit its bid for Gillette until there are multiple interested bidders.
- Dclose the acquisition deal as quickly as possible.
46If Gillette's managers wanted to maximize the value that Gillette received from its acquisition by P&G, they should
- Aseek information from P&G about the value that P&G will receive from its acquisition of Gillette.
- Bnot engage in negotiations with any bidder but P&G.
- Cclose the acquisition as quickly as possible.
- Dstop the acquisition.
47If P&G's acquisition of Wella had been delayed because it had to overcome a stipulation in Wella's corporate bylaws requiring that more than 50% of Wella's board of directors had to approve the takeover, this would be an example of
- Athe Pac Man defense.
- Ba poison pill.
- Cgreenmail.
- Da shark repellent.
48The most significant challenge P&G is likely to face in integrating each of the acquired companies into P&G's operations is likely to be ________ differences between P&G and each of the companies.
- Alogistical
- Bcultural
- Coperational
- Ddistribution
Informationen
- Beschreibung
- Quiz am Chapter 10 - Mergers and Acquisitions, erstellt von Strategy IO am 12/11/2016.
- Autor
- Strategy IO
- Sprache
- English
- Aufrufe
- 413
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