Quiz Ch 31 – Strategies for Changing Firm Management
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
What approaches can be employed to alter the management of a firm?
What approaches can be employed to alter the management of a firm?
True or false: Supermajorities bestow increased control to shareholders in the governance of the firm.
True or false: In a vertical merger, the buyer extends either toward the consumer or backward to raw material sources.
True or false: An aspiring acquirer initiating a direct tender offer to shareholders is identified as engaging in a proxy fight.
True or false: The acquiring firm buys a closely related company in a conglomerate merger.
True or false: A new asset category called goodwill is established under the purchase method of merger accounting.
True or false: It seems that in hostile takeovers, most of the gains are realized by the target companies.
True or false: Pre-offer defenses include litigation, asset restructuring, and liability restructuring.
True or false: The cost of the merger is calculated as the difference between the cash payment and the standalone value of Firm B when Firm A acquires Firm B for cash.
The calculation for the gain from a merger is expressed as Gain = PVAB − (PVA + PVB).