Which of the Following Statements Is Most CORRECT

question 26

Multiple Choice

Which of the following statements is most CORRECT?

• A) The smaller the synergistic benefits of a particular merger, the greater the scope for striking a bargain in negotiations, and the higher the probability that the merger will be completed.
• B) Since mergers are frequently financed by debt rather than equity, a lower cost of debt or a greater debt capacity are rarely relevant considerations when considering a merger.
• C) Managers who purchase other firms often assert that the new combined firm will enjoy benefits from diversification, including more stable earnings.However, since shareholders are free to diversify their own holdings, and at what's probably a lower cost, diversification benefits is generally not a valid motive for a publicly held firm.
• D) Operating economies are never a motive for mergers.
• E) Tax considerations often play a part in mergers.If one firm has excess cash, purchasing another firm exposes the purchasing firm to additional taxes.Thus, firms with excess cash rarely undertake mergers.

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Definitions:

Suicide Rate

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Identity Achievement

A status in which an individual has gone through an identity crisis and has made a commitment to a sense of identity (i.e., role or goal) that he or she has chosen.

James Marcia's Identity Statuses

a theory proposing four statuses of identity development: identity diffusion, foreclosure, moratorium, and achievement, based on the presence or absence of crisis and commitment.

Active Questioning

The practice of continuously asking questions to foster learning or find deeper understanding, often used in educational settings.