Quiz Ch 21 – T/F Impact of Merger Gain Size on Cash-Financed Mergers
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: In cash-financed mergers, the size of the merger gain does NOT impact the merger cost.
True or false: In cash-financed mergers, the size of the merger gain does NOT impact the merger cost.
True or false: The market value of a firm is likely to surpass its stand-alone value if investors perceive the possibility of an acquisition.
True or false: The evidence suggests that investors are willing to pay a premium for diversified firms, offering a strong incentive for companies to pursue mergers.
True or false: Unrelated business segments are more likely to be spun off or carved out from the rest of the firm’s activities.
True or false: Vertical integration is a sensible strategy when two firms have a high level of interdependence.
True or false: Management is often replaced when a firm undergoes a takeover.
True or false: Merger activity was minimal during the 1980s.
True or false: Economic gain from mergers occurs when the combined value of two firms is greater than their individual values.
True or false: The potential savings in merging two banks usually result from the consolidation of operations and the removal of redundant costs.
True or false: Firms make acquisitions for changing management.