Which Statement Best Describes Mergers

question 65

Multiple Choice

Which statement best describes mergers?

• A)Tax considerations often play a part in mergers. If one firm has excess cash, purchasing another firm exposes the purchasing firm to additional taxes. Thus, firms with excess cash rarely undertake mergers.
• B)The smaller the synergistic benefits of a particular merger, the greater the scope for striking a bargain in negotiations, and the higher the probability that the merger will be completed.
• C)Since mergers are frequently financed by debt rather than equity, a lower cost of debt or a greater debt capacity are rarely relevant considerations when considering a merger.
• D)Managers who purchase other firms often assert that the new combined firm will enjoy benefits from diversification, including more stable earnings. However, since shareholders are free to diversify their own holdings, and at what's probably a lower cost, diversification benefits are generally not a valid motive for a publicly held firm.

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Definitions:

Plan of Care

A comprehensive outline developed by healthcare professionals that describes a patient's diagnosis, treatment, and expected outcomes.

Allergy to Penicillin

An adverse immune response that occurs in some individuals when exposed to penicillin, a type of antibiotic.

MAR

Acronym for Medication Administration Record, a comprehensive report listing all medications prescribed and given to a patient.

Electronic Health Record (EHR)

A digital version of a patient's paper chart, providing real-time, patient-centered records that make information available instantly and securely to authorized users.