Quiz Ch 21 – T/F Multiple Motivations for Firm Acquisitions
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: Firms make acquisitions for changing management.
True or false: Firms make acquisitions for changing management.
True or false: A common poison pill allows existing shareholders to buy company shares at half price when a bidder acquires over 15%, with no discount offered to the bidder.
True or false: Poison pills, often employed by target firms, serve to dissuade potential bidders by making the company less attractive.
True or false: Poison pills are amendments to the corporate charter aimed at thwarting mergers.
True or false: Acquiring a firm can be driven by the desire to prevent the unnecessary depletion of the target firm’s cash reserves.
True or false: Divesting firms’ shareholders receive shares of the new company in both carve-outs and spin-offs.
True or false: Approval from at least 51% of the shareholders in each firm is necessary for a merger to proceed.
True or false: Takeovers typically result in benefits for the shareholders of the target firm.
True or false: Companies may opt for a spin-off, separating a business from the parent firm and distributing shares in the newly independent company to shareholders rather than selling a portion of their operations.
True or false: Synergy in a merger means the combined value of the two firms is greater than their individual values.