chap025 - Chapter 025 Mergers and Acquisitions Multiple...

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Chapter 025 Mergers and Acquisitions Multiple Choice Questions 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. SECTION: 25.1 TOPIC: MERGER TYPE: DEFINITIONS 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. SECTION: 25.1 TOPIC: CONSOLIDATION TYPE: DEFINITIONS 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. SECTION: 25.1 TOPIC: TENDER OFFER TYPE: DEFINITIONS 25-1
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Chapter 025 Mergers and Acquisitions 4. An attempt to gain control of a firm by soliciting a sufficient number of stockholder votes to replace existing management is called a: a. tender offer. B . proxy contest. c. going-private transaction. d. leveraged buyout. e. consolidation. SECTION: 25.1 TOPIC: PROXY CONTEST TYPE: DEFINITIONS 5. 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. SECTION: 25.1 TOPIC: GOING-PRIVATE TRANSACTION TYPE: DEFINITIONS 6. 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. SECTION: 25.1 TOPIC: LEVERAGED BUYOUT TYPE: DEFINITIONS 25-2
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Chapter 025 Mergers and Acquisitions 7. An agreement between firms to cooperate in pursuit of a joint goal is called a: a. consolidation. b. merged alliance. c. joint venture. d. takeover project. E . strategic alliance. SECTION: 25.1 TOPIC: STRATEGIC ALLIANCE TYPE: DEFINITIONS 8. An agreement between firms to create a separate, co-owned entity established to pursue a joint goal is called a: a. consolidation. b. strategic alliance. C . joint venture. d. merged alliance. e. takeover project. SECTION: 25.1 TOPIC: JOINT VENTURE TYPE: DEFINITIONS 9. 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. SECTION: 25.4 TOPIC: SYNERGY TYPE: DEFINITIONS 25-3
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Chapter 025 Mergers and Acquisitions 10. The payments made by a firm to repurchase shares of its outstanding stock from an individual investor in an attempt to eliminate a potential unfriendly takeover attempt are referred to as: a. a golden parachute. b. standstill payments. C . greenmail. d. a poison pill. e. a white knight. SECTION: 25.7
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This note was uploaded on 03/23/2011 for the course ECON 202098 taught by Professor Sameer during the Spring '11 term at University of Jordan.

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chap025 - Chapter 025 Mergers and Acquisitions Multiple...

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