Which of the Following Motives for Mergers Make Economic Sense

question 4

Multiple Choice

Which of the following motives for mergers make economic sense?

• A)To achieve economies of scale
• B)To reduce risk by diversification
• C)Merging to redeploy cash
• D)To increase earnings per share

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Definitions:

Set-Aside Program

Component of a government contract specifying that certain government contracts (or portions of those contracts) are restricted to small businesses and/or to women- or minority-owned companies.

Government Contracts

are agreements entered between companies and government entities for the provision of goods and services.

Qualifying Small Businesses

Refers to small businesses that meet specific criteria set by government or financial entities to be eligible for benefits or incentives.

Business Plan

A document that outlines a company's goals, the strategy to achieve them, financial forecasts, and market analysis.