The "Bootstrap Game" Is Played Somewhat in Defiance of Traditional

question 26

Multiple Choice

The "Bootstrap Game" is played somewhat in defiance of traditional merger logic in that it:

• A) provides immediate benefit through improved management.
• B) does not offer a positive NPV from the merger.
• C) stays in effect only until EPS are increased.
• D) does not require the approval of a majority of shareholders.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Bushel

A unit of volume that is used in the United States for measuring agricultural commodities, usually grains.

Bananas

A long, curved fruit with soft, pulpy flesh and yellow skin when ripe, commonly eaten as a staple food or snack.

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity (such as producing a specific good) more efficiently than another activity.