The "Bootstrap Game" May Mislead Investors Regarding the Prospects for a Merged

question 65

Multiple Choice

The "Bootstrap Game" may mislead investors regarding the prospects for a merged firm. How are investors potentially misled?

• A)The firm's management generates cost savings via temporary layoffs of highly paid executives.
• B)The firm gains intellectual property in a merger but then divests the operations of the target firm.
• C)The firm's management changes the name of an acquired firm to feign diversification.
• D)The firm acquires a target with low a P/E ratio, which generates short-term earnings per share growth without any true economic advantage.

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Definitions:

Occupational Segregation

The distribution of people across and within occupations and jobs, influenced by factors like gender, race, and education, often leading to inequality.

Efficient Allocation

The optimal distribution of resources in an economy, ensuring that these resources are used in a way that maximizes the net benefit to society.

Ethnic Groups

Communities of people who share common cultural characteristics, ancestral ties, and social experiences.

Government Programs

Initiatives or plans undertaken by a government to address social, economic, or environmental issues, which may involve legislation, services, or funding.