'Takeovers Are Value Enhancing Only Because of Synergistic Gains

question 22

Multiple Choice

'Takeovers are value enhancing only because of synergistic gains'.Which of the following answers is most accurate regarding the aforementioned statement?

• A)True.
• B)False,value won't be affected by takeovers.
• C)False,takeovers may also be value decreasing.
• D)False,takeovers may be value enhancing for other reasons (e.g.replacing inefficient management).

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Definitions:

Debt Financing

The act of borrowing funds from external sources, such as banks, to finance an entity's operations or growth.

Equity Financing

The process of raising capital through the sale of shares in an enterprise, thus offering investors ownership interests.

Initial Public Offering

An initial selling of shares to the public at large.

Stock Exchange

is a marketplace where securities, such as stocks and bonds, are bought and sold.