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Unformatted text preview: ch29 Student: _______________________________________________________________________________________ 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. 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. 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. 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 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 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 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. 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. 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. 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. 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. B. standstill agreement. C. greenmail provision. D. poison pill amendment. E. white knight provision. 12. A contract wherein the bidding firm agrees to limit its holdings in the target firm is called a: A. supermajority amendment. B. standstill agreement. C. greenmail provision. D. poison pill amendment....
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This note was uploaded on 12/21/2011 for the course NIKA 101 taught by Professor Temur during the Spring '11 term at Acton School of Business.

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ch29 - ch29 Student:

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