The "Bootstrap Game" Is Played Somewhat in Defiance of Traditional

question 26

Multiple Choice

The "Bootstrap Game" is played somewhat in defiance of traditional merger logic in that it:

• A) provides immediate benefit through improved management.
• B) does not offer a positive NPV from the merger.
• C) stays in effect only until EPS are increased.
• D) does not require the approval of a majority of shareholders.

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Definitions:

Fiscal Policy

Government policies regarding taxation and spending to influence the economy.

Monetary Policy

The actions of a central bank, currency board, or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates.

Inflation

A rise in prices and a decrease in the purchasing power of money over time.

Unemployment Rates

The percentage of the labor force that is jobless and actively looking for employment.