Suppose That Verizon and Sprint Were to Merge

question 51

Multiple Choice

Suppose that Verizon and Sprint were to merge. Ignoring potential antitrust problems, this merger would be classified as a:

• A) horizontal merger.
• B) vertical merger.
• C) conglomerate merger.
• D) monopolistic merger.

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Definitions:

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Absorption Costing

A bookkeeping technique that encases the entirety of manufacturing expenses such as direct materials, direct labor, along with both variable and fixed overhead costs, in the product’s cost.

Divisional Segment Margin

A measure of the profitability of a specific division or segment within a company, usually calculated as the division's earnings before interest and taxes divided by its revenues.

Net Operating Income

A company's revenue minus its operating expenses, not including taxes and interest charges.