Question
1.Synergy values are the additional values that companies realize through a merger and acquisition. Synergy values can take three forms. Generally speaking, the most significant
1.Synergy values are the additional values that companies realize through a merger and acquisition. Synergy values can take three forms. Generally speaking, the most significant and common form of synergy is:
Select one:
a. Lower expenses and cost
b. Longer growth period
c.Higher growth rate
d. Higher Cost of Capital
2.APV equals the sum of the base-case NPV(financed solely by equity) and_________________
Select one:
a. PV of interest
b. PV of interest tax shield
c. NPV of taxes
d. PV of taxes and interest
3.A reason for acquisitions is synergy. Synergy includes:
Select one:
a. Revenue enhancements
b. Cost reductions
c.Lower taxes
d.All of the above
e. None of the above
5.Why aprofitable firm might consider acquiring a firm that has had large recent losses and will continue to have losses into the near future?
Select one:
a. Tax Benefits
b.reduce costs of good sold
c.Increase Assets
d. Increase growth
6.Competition among bidders pushes gains away from selling shareholders
Select one:
a. False
b. True
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