Which of the Following Is Not a Reason for Merger

question 88

Multiple Choice

Which of the following is not a reason for merger and acquisition failures?

• A) The acquiring company pays too high a premium for the common stock of the target company.
• B) Top executives act in their best interests rather than those of the shareholders.
• C) The acquired company assets are poorly integrated into the acquiring company business lines.
• D) The acquisition leads to value creation.

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Definitions:

Equilibrium Level

Equilibrium level refers to the state in an economy or market where supply equals demand, so there is no tendency for change.

Disposable Income

Available financial assets to households for investments and outlays after income taxes have been applied.

Government Spending

Expenditures by government bodies on goods and services, including salaries, infrastructure, and welfare programs.

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.