Which of the Following Is Not a Reason for Merger

question 57

Multiple Choice

Which of the following is not a reason for merger and acquisition failures?

• A) The acquiring company pays a large premium for the common stock of the target company.
• B) Top executives act in their best interests rather than those of the shareholders.
• C) The acquisition leads to value creation.
• D) The acquired company assets are poorly integrated into the acquiring company business lines.

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Definitions:

Land Account

An account on the balance sheet that reports the cost of land owned by a company.

Double-declining-balance

A method of accelerated depreciation that doubles the rate at which an asset's book value declines, compared to straight-line depreciation.

Straight-line Depreciation

A method of allocating the cost of a tangible asset evenly over its useful life.

Financial Accounting

The field of accounting focused on reporting financial information and transactions for decision makers outside the organization.