The Text Gives a Number of Valid, Acceptable Reasons for Companies

question 19

Multiple Choice

The text gives a number of valid, acceptable reasons for companies to merge. Which of the following is NOT acceptable?

• A) Synergistic benefits arising from mergers.
• B) Reduction in competition resulting from mergers.
• C) Attempts to stabilize earnings by diversifying.
• D) Attempts to minimize taxes by acquiring a firm with large accumulated losses that can be used immediately.
• E) Using surplus cash to acquire another firm and prevent unfavorable tax consequences for shareholders.

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Definitions:

Broca's Area

A region in the frontal lobe of the brain linked to speech production and language processing.

Wernicke's Area

A region of the brain important for language comprehension, located in the temporal lobe.

Hippocampus

A major component of the brain in humans and other vertebrates, crucial for memory formation and spatial navigation.

Cerebral Cortex

The outer layer of the cerebrum in the brain, playing a key role in memory, attention, perception, cognition, awareness, thought, language, and consciousness.