Stone IncHas Just Been Through a Friendly Takeover

question 49

Multiple Choice

Stone Inc.has just been through a friendly takeover.This means that

• A) two firms in completely unrelated businesses merge.
• B) two firms agree to join together.
• C) the acquired company welcomes the acquisition because it may need cash or other benefits which it believes will be available from the other firm.
• D) the organization will buy back their own stock from an investor who threatened a hostile takeover.
• E) the two firms were direct competitors before the merger and now will not compete with each other after the merger.

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Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of production.

Break-Even Point

The level of production or sales at which total costs equal total revenue, resulting in no net profit or loss.

Fixed Costs

Costs that remain constant in total regardless of changes in the level of production or sales volume.

Unit Selling Price

The amount of money charged for one unit of a product or service, often determining revenue and profitability.