Ross. Westerfield. Jaffe. Jordan Chapter 29 Test

Ross. Westerfield. Jaffe. Jordan Chapter 29 Test -...

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Unformatted text preview: 29-1CHAPTER 29 Mergers and Acquisitions Multiple Choice Questions: I. DEFINITIONS MERGER a 1. The complete absorption of one company by another, wherein the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity, is called a: a. merger. b. consolidation. c. tender offer. d. spinoff. e. divestiture. Difficulty level: Easy CONSOLIDATION b 2. A merger in which an entirely new firm is created and both the acquired and acquiring firms cease to exist is called a: a. divestiture. b. consolidation. c. tender offer. d. spinoff. e. conglomeration. Difficulty level: Easy TENDER OFFER c 3. A public offer by one firm to directly buy the shares of another firm is called a: a. merger. b. consolidation. c. tender offer. d. spinoff. e. divestiture. Difficulty level: Easy HORIZONTAL ACQUISITION d 4. The acquisition of a firm in the same industry as the bidder is called a _____ acquisition. a. conglomerate b. forward c. backward d. horizontal e. vertical Difficulty level: Easy 29-2VERTICAL ACQUISITION e 5. The acquisition of a firm involved with a different production process stage than the bidder is called a _____ acquisition. a. conglomerate b. forward c. backward d. horizontal e. vertical Difficulty level: Easy CONGLOMERATE ACQUISITION a 6. The acquisition of a firm whose business is not related to that of the bidder is called a _____ acquisition. a. conglomerate b. forward c. backward d. horizontal e. vertical Difficulty level: Easy PROXY CONTEST b 7. An attempt to gain control of a firm by soliciting a sufficient number of stockholder votes to replace the current board of directors is called a: a. tender offer. b. proxy contest. c. going-private transaction. d. leveraged buyout. e. consolidation. Difficulty level: Easy GOING-PRIVATE TRANSACTION c 8. A business deal in which all publicly owned stock in a firm is replaced with complete equity ownership by a private group is called a: a. tender offer. b. proxy contest. c. going-private transaction. d. leveraged buyout. e. consolidation. Difficulty level: Easy 29-3LEVERAGED BUYOUT d 9. Going-private transactions in which a large percentage of the money used to buy the outstanding stock is borrowed is called a: a. tender offer. b. proxy contest. c. merger. d. leveraged buyout. e. consolidation. Difficulty level: Easy SYNERGY e 10. The positive incremental net gain associated with the combination of two firms through a merger or acquisition is called: a. the agency conflict. b. goodwill. c. the merger cost. d. the consolidation effect. e. synergy. Difficulty level: Easy SUPERMAJORITY AMENDMENT a 11. A change in the corporate charter making it more difficult for the firm to be acquired by increasing the percentage of shareholders that must approve a merger offer is called a: a. supermajority amendment....
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Ross. Westerfield. Jaffe. Jordan Chapter 29 Test -...

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