Which of the Following Statements Regarding Mergers and Taxes Is

question 55

Multiple Choice

Which of the following statements regarding mergers and taxes is false?

• A) Because it may be easier to measure performance accurately in a conglomerate, agency costs may be reduced and resources may be more efficiently allocated.
• B) Because these employees are obligated to hold idiosyncratic risk, they benefit when the firm reduces that risk by conglomerating.
• C) Like a large portfolio, large firms bear less idiosyncratic risk, so often mergers are justified on the basis that the combined firm is less risky.
• D) Because most stockholders will already be holding a well-diversified portfolio, they get no further benefit from the firm diversifying through acquisition.

---

Definitions:

Men and Women

Terms referring to the two primary categories of human gender, each associated with distinct biological and societal roles.

Biological Factors

Natural influences on organisms, including genetic, neurophysiological, and anatomical aspects that affect behavior and health.

Sexual Orientation

The enduring pattern of emotional, romantic, or sexual attractions to men, women, both genders, neither gender, or another gender.

Gender Stereotypes

Preconceived ideas or beliefs about roles and behaviors deemed appropriate for men and women in a society.