Mergers and Acquisitions Are Often Driven by Such Strategic Objectives

question 59

Multiple Choice

Mergers and acquisitions are often driven by such strategic objectives as

• A) expanding a company's geographic coverage or extending its business into new product categories.
• B) reducing the number of industry key success factors.
• C) reducing the number of strategic groups in the industry.
• D) facilitating a company's shift from a low-cost leadership strategy to a focused low-cost strategy.
• E) lengthening a company's value chain and thereby putting it in a better position to deliver superior value to buyers.

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Definitions:

Floatation Costs

Expenses incurred by a company in issuing new securities, including underwriting fees and registration fees.

WACC

Weighted Average Cost of Capital - a measure of a firm's cost of capital in which each category of capital is proportionately weighted.

WACC

stands for Weighted Average Cost of Capital, which is a calculation of a firm's capital cost from all sources, including equity and debt, weighted accordingly.

Capital Asset Pricing Model

A model used to determine the theoretical rate of return of an asset, considering risk and the time value of money.