A Conglomerate Merger

question 227

Multiple Choice

A conglomerate merger

• A) can extend the line of products sold, extend the territories in which products are sold, or combine totally unrelated products.
• B) is defined as a merger involving two firms that previously had a buyer-seller relationship.
• C) is defined as a merger involving two firms producing the same or similar products and selling them in the same geographical market.
• D) is illegal, per se.

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Definitions:

Times Interest Earned Ratio

A financial metric that measures a company's ability to pay its interest expenses with its before-interest earnings.

Gross Margin Percentage

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, representing the proportion of each sales dollar that is gross profit.

Return on Equity

A measure of financial performance that calculates the return on shareholders' equity investments.

Equity Multiplier

A financial ratio indicating how much of a company's assets are financed by its shareholders' equity.