________ Is a Type of Merger in Which Acquiring and Acquired

question 72

Multiple Choice

________ is a type of merger in which acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other. 

• A) Market extension merger
• B) Horizontal merger
• C) Product extension merger
• D) Vertical merger

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Definitions:

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Sales

The activity of selling goods or services in exchange for money or other compensation.

DFL

Degree of Financial Leverage, a ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating income.

EPS

Earnings Per Share; a company's profit divided by the outstanding shares of its common stock, indicating company profitability on a per-share basis.