Miniature Precision Corporation, a Microprocessor Manufacturer, Recently Acquired Cameron-Price, a Plastics

question 8

Multiple Choice

Miniature Precision Corporation, a microprocessor manufacturer, recently acquired Cameron-Price, a plastics mold manufacturer.Miniature Precision financed the transaction with 90 percent borrowed money and used Cameron-Price's assets as collateral.This type of merger is commonly known as a(n) :

• A)hostile takeover
• B)greenmail
• C)leveraged buyout
• D)institutional takeover
• E)financial merger

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Definitions:

Adjunct Asset

An addition to an asset that increases its value, often for accounting or tax purposes.

Equity Method

An accounting technique used to record investments in other companies by recognizing income and changes in investment value.

Book Value

The net value of an asset or liability recorded in financial statements, calculated as original cost minus accumulated depreciation or amortization.

Available-for-sale Debt Investment

A type of financial asset representing debt instruments that a company plans to sell before their maturity date but are not actively traded for profit in the short term.