The Fact That Acquisitions Impose Substantial Costs on Acquiring Firms

question 29

Multiple Choice

The fact that acquisitions impose substantial costs on acquiring firms (including both the acquisition premium and legal and advisory fees) implies that:

• A)Acquirers need to be sure that potential of the acquisition to create value exceeds the costs of incurred by the acquisition
• B)Acquisitions tend to be in the interests of managers but contrary to the interests of shareholders
• C)Small acquisitions to be preferred to large acquisitions
• D)Boards of directors should be more active in opposing acquisition proposals. To instill more effective programs of corporate social responsibility

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Definitions:

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Demeaning or insulting oneself to control the behavior of another person.

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A highly skilled and promising individual recently promoted to a managerial position, showing great potential for leadership.

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A captivating, inspiring personality with charm and charismatic-like qualities.

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Negotiating terms between parties to reach a mutually advantageous agreement or compromise.