Question 1

Pinder Ltd is an electronics, home, and whitegoods retailer. It recently completed a takeover of Value Co which sells home entertainment systems, small and large kitchen appliances including washing machines, refrigerators etc. This takeover can be best classified as a

Group of answer choices

Vertical takeover

Conglomerate takeover

Horizontal takeover

None of the others.

Hostile takeover

Q Which of the following statements accurately describe takeovers?

One disadvantage of cash offers is that it can makes the offer more likely to be rejected by the target firms shareholders.

Takeover activities usually occur in waves.

More than one of the other statements are correct.

None of the other statements are correct.

Takeovers that result in market monopolies can be subject to approval be government regulators.

Question

Which of the following statements accurately describe spin-offs?

Group of answer choices

More than one of the other statements are correct.

A spin-off is the simplest way to make a firm more focused.

In a spin-off, the shares of the spun-off firm are distributed to existing shareholders.

None of the other statements are correct.

In a spin-off, the parent firm keeps significant ownership of the spun-off firm.

Question

Which of the following statements accurately describe dividend policy?

Group of answer choices

High dividend payout policy can increase the potential conflict between managers and shareholders.

None of the other statements are correct.

More than one of the other statements are correct.

Increasing dividends usually signal that managers believe the firm has poor cash flow prospects in the future.

Managers are usually willing to increase dividends even if the increase in earnings is likely to be unsustainable.

Question

Which of the following statements accurately describe option positions?

Group of answer choices

More than one of the other statements are correct.

None of the other statements are correct.

Buying the right to sell an underlying asset is referred to as a short call.

Buying the right to buy an underlying asset is referred to as a long call.

Selling the right to buy an underlying asset is referred to as a long put.