The Justification for the Benefits of Diversification from Mergers Include

question 28

Multiple Choice

The justification for the benefits of diversification from mergers include all of the following,EXCEPT:

• A)tax loss benefits.
• B)lower cost of debt or increased debt capacity.
• C)direct risk reduction.
• D)liquidity enhancement.

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Definitions:

System II

Refers traditionally to the analytical, controlled, and effortful mode of thinking, as contrasted with the fast, automatic, intuitive processing of System I.

System I

A term often used in behavioral economics to describe the fast, instinctive, and emotional way of thinking, as opposed to slower, more deliberative thinking.

Availability

The ease with which a particular piece of information can be recalled from memory, often influenced by recent experience or emotional impact.

Representativeness Heuristics

A mental shortcut used to judge the probability of an event by its similarity to a prototype or stereotype.