Article Summary In an Attempt to Get Approval for a $6.3 Billion

question 123

Multiple Choice

Article Summary
In an attempt to get approval for a $6.3 billion merger with Office Depot, Staples met with FTC regulators to discuss the possible sale of assets so the merger can proceed. The Competition Bureau of the FTC had previously indicated that it would not approve the merger as initially structured, but Staples expressed optimism that it would be able to reach a settlement with the FTC. Critics have argued that a merger of Staples and Office Depot will result in higher prices for office supplies.
Source: Josh Kosman, "Staples still angling for Office Max merger," New York Post, October 14, 2015.
-Refer to the Article Summary above.The standards used by the Department of Justice and the FTC to evaluate a potential merger such as the one between Staples and Office Depot are based on market concentration as determined by the

• A)Herfindahl-Hirschman Index.
• B)Clayton Antitrust Act.
• C)Anti-Collusion Task Force.
• D)Robinson-Patman Act.

---

Definitions:

Economy

Refers to the comprehensive system of production, distribution, and consumption of goods and services within a specific geographic region.

Constant Growth Model

A method for valuing a stock by assuming a constant rate of dividend growth, often used in financial analysis to estimate the present value of future dividends.

Terminal Value

An estimate of an asset's value at the end of a projection period, often used in discounted cash flow analysis.

Cash Flow Analysis

The examination of a company's inflows and outflows of cash to evaluate its financial health and operational efficiency.