The Free-Cash-Flow Theory of Takeovers Predicts That Firms

question 86

Multiple Choice

The free-cash-flow theory of takeovers predicts that firms:

• A) without free cash flow will become the most common LBOs.
• B) with free cash flow will continue to be the acquirers.
• C) with excess cash do not have a tendency to use it wisely.
• D) with excess cash tend to have the most carve-outs.

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Definitions:

Common Ancestor

The most recent individual from which all organisms in a group are directly descended.

Green Algae

Members of a diverse group of photosynthetic protists; contain chlorophylls a and b and have other biochemical characteristics like those of plants.

Chlamydomonas

A genus of green algae that are unicellular flagellates, often used in biological research as a model organism.

Plasmodium

A genus of parasitic protozoa, several species of which are responsible for causing malaria in humans.