Which of the Following Statements Is FALSE

question 59

Multiple Choice

Which of the following statements is FALSE?

• A)All else being equal,larger firms,because they are more diversified,have an increased probability of bankruptcy.
• B)To justify a takeover based on operating losses,management would have to argue that the tax savings are over and above what the firm would save using carryforward provisions.
• C)It is possible to combine two companies with the result that the earnings per share of the merged company exceed the premerger earnings per share of either company,even when the merger itself creates no economic value.
• D)When an acquirer buys a private target,it provides the target's owners with a way to reduce their risk exposure by cashing out their investment in the private target and reinvesting in a diversified portfolio.

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Definitions:

Dot-Com Bust

The collapse of numerous internet-based companies in the early 2000s following speculative investment in the technology sector.

Financial Meltdown

A sudden and severe downturn in the financial markets that leads to a loss of asset values and can trigger widespread economic crisis.

Equivocality

The existence of multiple and potentially conflicting interpretations or meanings in a situation or communication.

Weick

Karl E. Weick, an American organizational theorist known for his contributions to the understanding of organizational behavior and sensemaking.