Synergistic Gains

question 97

Multiple Choice

Synergistic gains

• A)are obtained when the acquiring firm is greater in value than the stand-alone valuations of the target firm(s).
• B)can only be obtained by increases in market power.
• C)are obtained when the value of the combined firm is greater than the stand-alone valuations of the individual (acquiring and target) firms.
• D)none of the above

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Definitions:

Capital Goods

Long-term assets used in the production of other goods and services, such as machinery, buildings, and equipment, essential for creating consumer goods.

Net Capital Outflow

The net flow of funds invested overseas by a country over a certain period, calculated as the difference between the capital leaving the country and capital entering it.

Foreign Direct Investment

An investment made by a company or individual in one country in business interests in another country, in the form of establishing business operations or acquiring business assets.

Foreign Portfolio Investment

Investments in foreign countries' securities, such as stocks and bonds, without control over the management of those entities.