1. Although there is substantial evidence that mergers pay off for target firm shareholders around the time the takeover is announced, shareholder wealth creation in the 3-5 years following a takeover is often limited. True or false. Explain.

2. A firms market share relative to another firms may be a useful measure of its overall operating efficiency compared to competitors. True or false. Explain

3. Poison pills represent a new class of securities issued by a company to its shareholders, which have no value unless an investor acquires a specific percentage of the firms voting stock. True or false. Explain

4. Agreements of purchase and sale frequently include provisions allowing the acquirer to back out of the transaction if it is challenged by the FTC or DoJ on antitrust grounds. True or false. Explain

5. Why is it important to understand the assumptions underlying a business plan or an acquisition plan?

6. The letter of intent often specifies the type of information to be exchanged as well as the scope and duration of the potential buyers due diligence. True or false. Explain.