'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:

Third Parties

Entities or individuals that are not directly involved in a transaction or agreement but may be affected by or have an interest in its outcome.

Arbitraging

The practice of buying a good in one market at a lower price and selling it in another market at a higher price to profit from the price difference.

Price Discriminate

The practice of selling the same product or service at different prices to different customers, based on what the seller believes each customer is willing to pay.

Vertical Relationships

Business arrangements or interactions between companies at different levels of the supply chain, such as manufacturers and retailers.