Which of the Following Is True of Acquisitions

question 47

Multiple Choice

Which of the following is true of acquisitions?

• A)The acquiring company will be eligible for any financial help from the company whose shares it is trying to acquire.
• B)It affords the firm maximum control and has the most potential to provide above-average returns.
• C)The acquiring company enters into an agreement with the target business to pursue a set of agreed-upon goals while remaining independent organizations.
• D)The acquiring firm avoids the expense of establishing operations in the new country.
• E)The acquiring company gains control of another firm by purchasing its stock.

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Definitions:

Inventory Change

The difference in inventory levels between two time periods, reflecting purchases, sales, and usage.

Accrued Liabilities

Obligations that a company has incurred but not yet paid for, recognized in accounting to match expenses with the revenues they help to generate.

Indirect Method

A cash flow statement preparation approach that starts with net income and adjusts for non-cash transactions and changes in working capital.

Marketable Securities

Financial instruments that are easily convertible into cash and may include stocks, bonds, and Treasury bills.