The Fact That Acquisitions Impose Substantial Costs on Acquiring Firms

question 6

Multiple Choice

The fact that acquisitions impose substantial costs on acquiring firms (including both the acquisition premium and legal and advisory fees) implies that:

• A)Acquirers need to be sure that potential of the acquisition to create value exceeds the costs of incurred by the acquisition
• B)Acquisitions tend to be in the interests of managers but contrary to the interests of shareholders
• C)Small acquisitions to be preferred to large acquisitions
• D)Boards of directors should be more active in opposing acquisition proposals.

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Definitions:

Direct Supervision

The practice of overseeing employees' performance and tasks in a close and hands-on manner to ensure effectiveness and adherence to protocols.

Job Descriptions

A formal document that outlines the duties, responsibilities, required qualifications, and reporting relationships of a specific job.

Division of Labor

The separation of tasks in any economic system or organization so that participants may specialize, increasing efficiency and productivity.

Flatter Span

A management structure with fewer levels of hierarchy and a broader span of control, allowing for more direct communication and less formal supervision.