Which of the Following Statements Regarding Efficiency Gains Is False

question 2

Multiple Choice

Which of the following statements regarding efficiency gains is false?

• A) Takeovers relying on the improvement of target management are difficult to complete, and post-takeover resistance to change can be great. Thus not all inefficiently run organizations are necessarily more efficient following a takeover.
• B) Although identifying poorly performing corporations is relatively easy, fixing them is another matter entirely.
• C) A justification that acquirers cite for paying a premium for a target is efficiency gains, which are often achieved through an elimination of duplication.
• D) A chief executive of an inefficiently run corporation can be ousted by current shareholders voting to replace the board of directors, and in fact a large number of ineffective managers are replaced in this way.

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Definitions:

Negotiation

The process by which two or more parties aim to reach a mutual agreement through dialogue and compromise on various issues.

Handwritten Signature

A person's unique method of writing their name with pen and paper, often used for authorization or personal verification.

Bearer Instrument

Any instrument that is not payable to a specific person, including instruments payable to the bearer or to “cash.”

Authorized Representative

An individual or entity legally empowered to act on behalf of another person or group in business dealings.