As a Mode of FDI Entry, Cross-Border M&A Offers Two

question 51

Multiple Choice

As a mode of FDI entry, cross-border M&A offers two key advantages over greenfield investments:

• A)speed and access to proprietary assets.
• B)firms bolster their competitive positions in the world market by acquiring special assets from other firms or using their own assets on a larger scale.
• C)firms can better leverage their intangible assets and on a larger scale.
• D)none of the above

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Definitions:

Intra-Entity Gains

Profits resulting from transactions within the same entity or between entities under common control, which are not realized in the consolidated financial statements until sold to an external party.

Initial Value Method

An accounting approach where investments are recorded at their cost at the time of acquisition without adjustment for market changes.

Noncontrolling Interest

The portion of equity in a subsidiary not owned by the parent company, reflecting the equity interest of minority shareholders.