For a Merger to Add Value to Both Sets of Shareholders

question 16

Multiple Choice

For a merger to add value to both sets of shareholders realistic synergies must be identified and achieved. This implies

• A)The buyer must have intimate knowledge of the company being bought
• B)The company being bought must have detailed knowledge about the acquirer
• C)Both A and B are true
• D)Neither A nor B really matters, as everything depends on postmerger integration in the end

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Definitions:

Sociological Principles

Encompasses the basic concepts, frameworks, and theoretical fundamentals that guide the study of society, social relationships, and social behavior.

Psychological Behaviors

Actions or reactions of an individual, stemming from their mental state and emotional responses, often studied within the context of psychology.

George Homans

A prominent American sociologist who contributed significantly to the development of social exchange theory.

Social Exchange Theory

A theory suggesting that social behavior is the result of an exchange process aiming to maximize benefits and minimize costs to the individuals or groups involved.