Which of the Following Is Not a Reason for Merger

question 55

Multiple Choice

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

• A)The acquiring company pays 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:

Accounts Receivable

Money owed by customers to a company for goods or services that have been delivered or used but not yet paid for.

Forward Exchange Contracts

Financial derivatives that lock in an exchange rate today for the purchase or sale of a currency on a future date.

Financial Instruments

Deals that create a financial asset for one entity and simultaneously generate either a financial liability or an equity instrument for another entity.

Accounts Payable

Liabilities to suppliers or creditors for goods, services, or supplies purchased on credit and not yet paid for.