Mergers and Acquisitions UPDATED Questions and CORRECT Answers
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Course
Mergers and Acquisitions
Institution
Mergers And Acquisitions
Mergers and Acquisitions UPDATED
Questions and CORRECT Answers
The annual dollar value of M&A transactions over the years has fluctuated considerably -
CORRECT ANSWER- TRUE
M&A activity peaked in the 1980s and has never again reached the same level - CORRECT
ANSWER- FALSE
Only struggling, fi...
Mergers and Acquisitions UPDATED
Questions and CORRECT Answers
The annual dollar value of M&A transactions over the years has fluctuated considerably -
CORRECT ANSWER✔✔- TRUE
M&A activity peaked in the 1980s and has never again reached the same level - CORRECT
ANSWER✔✔- FALSE
Only struggling, financially distressed firms agree to participate in mergers - CORRECT
ANSWER✔✔- FALSE
Conglomerate firms typically diversify by internally developing new firms - CORRECT
ANSWER✔✔- FALSE
One benefit of financial conglomerates is potentially more efficient resource allocation -
CORRECT ANSWER✔✔- TRUE
New technology impacts individual firms, but rarely plays a role in merger decisions -
CORRECT ANSWER✔✔- FALSE
Short-form mergers allow firms with highly concentrated ownership to combine without
shareholder approval - CORRECT ANSWER✔✔- TRUE
The acquiring company always seeks to erase the identity of the purchased firm in order to
completely absorb it - CORRECT ANSWER✔✔- FALSE
Warren Buffett believes that mergers regularly turn toads into handsome princes - CORRECT
ANSWER✔✔- FALSE
One purpose of laws that delay the completion of mergers is to allow other bidders to make
competing offers - CORRECT ANSWER✔✔- TRUE
, Arbitragers trading securities of firms involved in merger negotiations destabilize financial
markets by "crowding out" individual investors - CORRECT ANSWER✔✔- FALSE
95% of tender offers are hostile - CORRECT ANSWER✔✔- FALSE
The 1929 stock market crash was the catalyst for the introduction of federal securities
legislation - CORRECT ANSWER✔✔- TRUE
"Parking" of securities refers to the practice by which potential takeover targets refuse to
issue stocks that might fall into the hands of corporate raiders - CORRECT ANSWER✔✔-
FALSE
The Racketeer influenced and Corrupt Organization Act of 1970 (RICO) has been applied to
cases where securities firm were alleged to have defrauded investors - CORRECT
ANSWER✔✔- TRUE
It is illegal for an outsider to trade shares on the basis of "misappropriated" information -
CORRECT ANSWER✔✔- TRUE
One purpose of laws that delay the completion of takeovers is to allow other potential
acquirers to gather information on the target - CORRECT ANSWER✔✔- TRUE
Stock prices typically gain after adoption of state antitakeover legislation - CORRECT
ANSWER✔✔- FALSE
The Sherman Act of 1980 prohibited mergers that would tend to create monopoly or market
control - CORRECT ANSWER✔✔- TRUE
A common way that acquirers skirted antitrust regulation in the 1980s was by purchasing the
target's assets rather than equity - CORRECT ANSWER✔✔- FALSE
The HHI is a measure of concentration based on market share of firms in an industry -
CORRECT ANSWER✔✔- TRUE
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