Which of the Following Statements Is Most CORRECT

question 12

Multiple Choice

Which of the following statements is most CORRECT?

• A) A defensive merger is one where the firm's managers decide to merge with another firm to avoid or lessen the possibility of being acquired through a hostile takeover.
• B) Acquiring firms send a signal that their stock is undervalued if they choose to use stock to pay for the acquisition.
• C) Cash payments are used in takeovers but never in mergers.
• D) Managers often are fired in takeovers, but never in mergers.
• E) If a company that produces military equipment merges with a company that manages a chain of motels, this is an example of a horizontal merger.

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Definitions:

Intangible Property

Assets that have no physical presence but have value, such as copyrights, trademarks, and patents.

Bank Accounts

Financial accounts maintained by individuals or businesses with a bank, allowing for the deposit and withdrawal of money and other financial transactions.

Stocks

Shares of ownership in a company, representing a claim on part of the company's assets and earnings.

Purchase

Purchase refers to the act of obtaining goods or services in exchange for money or other valuable consideration.