Which of the Following Statements Is Most CORRECT

question 11

Multiple Choice

Which of the following statements is most CORRECT?

• A) If a company that produces military equipment merges with a company that manages a chain of motels,this is an example of a horizontal merger.
• B) A defensive merger is one where the firm's managers decide to merge with another firm to avoid or lessen the possibility of being acquired through a hostile takeover.
• C) Acquiring firms send a signal that their stock is undervalued if they choose to use stock to pay for the acquisition.
• D) In a liquidation,the firm's existing stockholders are given new stock representing separate ownership rights in the division that was divested.The division establishes its own board of directors and officers,and it becomes a separate company.
• E) If there are no synergistic benefits to be gained from a merger,the acquiring company will stop its plans for the merger.However,if synergistic gains are large,plans for the merger will continue.In fact,the greater the synergistic gains,the smaller the gap between the target's current price and the maximum the acquiring company could pay because of the acquiring company's upper hand in the merger.

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Definitions:

Moral Development Theory

A framework that explores how individuals learn to differentiate right from wrong and develop ethical behavior and attitudes as they grow.

Moral Development Theory

A framework that explains the evolution of human morality and ethical behavior through different stages of life, primarily associated with psychologist Lawrence Kohlberg.

Preconventional

A stage in Kohlberg's theory of moral development where behavior is motivated by anticipation of pleasure or pain rather than by societal rules or conventions.

Conventional

Pertaining to methods or practices that are widely accepted and used, typically because they have been established over time.