Most of the Biggest Mergers and Acquisitions Since 2000 Have

question 38

Multiple Choice

Most of the biggest mergers and acquisitions since 2000 have been horizontal-i.e.between companies in the same industry.This reflects the fact that:

• A)Antitrust authorities have been more concerned with vertical than horizontal mergers and acquisitions
• B)By showing that diversification does not offer significant risk-spreading benefits,modern financial theory has undermined the attractions of diversifying mergers and acquisitions
• C)Horizontal mergers and acquisitions offer the greatest potential for value creation through cost reduction and moderating competition
• D)CEOs favor horizontal mergers and acquisitions because of their desire to eliminate rivals.

---

Definitions:

Expert Power

The capacity to influence others because of specialized knowledge.

Technical Areas

Specific fields or sectors focused on scientific, engineering, or technological disciplines.

Reward Power

The capacity to offer something of value as a means of influencing other people.

Coercive Power

The capacity to punish or withhold positive outcomes as a means of influencing other people.