A Merger for Diversification Is Unnecessary from the Perspective of Stockholders

question 31

True/False

A merger for diversification is unnecessary from the perspective of stockholders, because they can accomplish the same diversification by selling some of the acquirer's stock and buying some of the target's.

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Definitions:

Sherman Act

A foundational antitrust law in the United States aimed at prohibiting monopolistic and anti-competitive practices.

Unreasonable Conduct

Behavior by an individual or entity that is not rational or sensible, often violating norms or laws.

Antitrust Actions

Legal measures taken to prevent or reduce monopoly power and foster competition in the marketplace.

Antitrust Action

Measures enforced by governments to prevent or reduce market monopolies and promote competition among businesses.