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:

Environmental Regulations

Laws and rules governing how businesses can interact with the environment, aimed at reducing pollution and protecting natural resources.

Law of Agency

A legal principle governing the relationship between a principal and their agent, where the agent is authorized to act on behalf of the principal in contractual or business transactions.

Apparent Authority

A situation where a person appears to have the authority to act on behalf of an organization, leading others to reasonably believe they have such power.

Implied Authority

The power assumed by a person that is reasonably necessary to carry out his or her expressed powers.