Which of the Following Would Not Be a Reason for the Management

question 161

Multiple Choice

Which of the following would not be a reason for the management of a target company to resist a takeover by an acquiring company?

• A)Management of the target company may feel that the tender offer is too high.
• B)Management of the target company may not think that the acquiring company's management style will be effective in the target company.
• C)Management of the target company may be concerned about losing personal power and influence.
• D)Neither a. nor b. would be a reason to resist a takeover.

---

Definitions:

Straight-Line Depreciation

A way of spreading the financial load of a tangible good across its effective lifespan in consistent yearly portions.

Capital Budgeting

The process of evaluating and selecting long-term investments compatible with the firm's goal of wealth maximization.

Straight-Line Depreciation

Involves evenly spreading the expense of an asset over its estimated useful life.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the organization's goal of maximizing shareholder value.