A Merger Adds Value by Creating Synergies

question 24

Multiple Choice

A merger adds value by creating synergies.Which of the following is not a possible source of synergy?

• A) Economies of scale
• B) Economies of vertical integration
• C) Combined complementary resources
• D) Diversification

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Definitions:

Productivity

A measure of the efficiency of production, usually defined as the ratio of outputs produced to inputs used.

Opportunity Costs

The cost of foregoing the next best alternative when making a decision or choosing one option over another.

Opportunity Cost

The financial consequence of rejecting the subsequent optimal choice when deciding.

TV Commercials

Short segments on television intended to persuade viewers to buy products or services.