During periods of high inflation the market value of

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15. During periods of high inflation, the market value of assets is often less than their book value. This often creates an attractive M&A opportunity. True or False
Multiple Choice: Circle only one of the alternatives. (Total 15 points, each question 1 point) 1. Which of the following are not true about economies of scale?
2. Which of the following is not true of unrelated diversification?
3. Which of the following is not true of strategic realignment?
4. The hubris motive for M&As refers to which of the following? a. Explains why mergers may happen even if the current market value of the target firm reflects its true economic value b. The ratio of the market value of the acquiring firm’s stock exceeds the replacement cost of its assets c. Agency problems d. Market power e. The Q ratio
5. The control model of corporate governance is applicable under all of the following conditions except for
MGT 4066 Assignment 1
3 c. Ownership and control overlap d. Equity ownership is widely dispersed e. A, B, & D only 6. Which of the following are the basic principles on which the market model is based?
7. Which of the following statements best describes the business judgment rule?

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