Which of the Following Statements Regarding Recapitalisation as a Takeover

question 41

Multiple Choice

Which of the following statements regarding recapitalisation as a takeover defence is FALSE?

• A)Restructuring itself can produce efficiency gains, often removing the principal motivation for the takeover in the first place.
• B)In many cases, a substantial portion of the synergy gains that an acquirer anticipates from a takeover are savings from a decrease in leverage as well as other cost reductions.
• C)Another defence against a takeover is a recapitalisation, in which a company changes its capital structure to make itself less attractive as a target.
• D)By increasing leverage on its own, the target firm can reap the benefit of the interest tax shields.

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Definitions:

Transience

The tendency for memory and other cognitive processes to diminish over time, leading to forgetting or the loss of information.

Recognition

The process of identifying something previously seen, heard, or experienced through memory.

Recall

The mental process of retrieving information from the past, without being re-exposed to it in the present.

Engram

A hypothetical means by which memory traces are stored as biophysical or biochemical changes in the brain in response to external stimuli.