Quiz Ch 21 – T/F Poison Pills: Safeguarding Against Mergers
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: Poison pills are amendments to the corporate charter aimed at thwarting mergers.
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: Synergy in a merger means the combined value of the two firms is greater than their individual values.
True or false: Synergy in mergers can arise from economies of vertical integration.
True or false: The presence of a territorial tax system acts as a motivation for companies to explore tax inversion-driven mergers.
True or false: Firms with complementary resources in the production process are rarely seen as ideal candidates for mergers, contrary to what might be expected logically.
True or false: Mergers often trigger additional capital gains taxes for shareholders, a phenomenon referred to as tax inversion.