The Acquisition of a Firm in the Same Industry as the Bidder

question 26

Multiple Choice

The acquisition of a firm in the same industry as the bidder is called a ________ acquisition.

• A)conglomerate
• B)forward
• C)backward
• D)horizontal
• E)vertical

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Definitions:

Common Shareholders' Equity

The portion of a company's equity that is attributable to common shares, representing the residual interest in the net assets of the company.

Return on Assets

A profitability ratio that measures how efficiently a company uses its assets to generate profit, calculated by dividing net income by total assets.

Debt to Total Assets

A financial ratio that shows the proportion of a company's assets that are financed through debt.

Basic Earnings per Share

A measure of a company's profitability, calculated by dividing net income by the number of outstanding common shares.