c e (26) a 7. Which of the following is an example of economies of scope? (26) a United Airlines buying Hertz Car Rental and Hilton Hotel, b. Exxon merging with Mobile AOL buying Time Warner a SBC buymg AT&T K-Mart buying Sears. 8. Which of the following statements is most correce? If a company which produces military equipment merges with a company which manages a chain of motels, this is an example of a horizontal merger. b If a company which produces gasoline and oil products merges with a company which managed a chain of gas stations, this is an example of a vertical merger. Cif a company buys a firm that is not in the same industry, this is an example of efficient diversification d. If a manufacturing company merges with a retail firm, this is an example of monopolistic combination e lf a manager opposes a merger, this is always considered to be an example of selfish, but not illegal bahavior 9. Which of the following is nor a reason for merging? (26) 2 Operating synergy b Diversification Target Undervaluation, d Break-up Value Creative destruction 10. In the example in the notes based on the Random Walk Down Wall Street book that discusses the EPS, which of the following statements is most correct? (26) a Managers can increase the EPS by authorizing a stock repurchase immediately after a hostile bid is annouced. b. Managers can increase the EPS by authorizing a stock split immediately after a hostile bid is announced Most of the time, EPS can be increased if the merger is done with a cash bid d. Most of the time EPS can be increased if a stock swap is used Most of the time EPS can be increased if "pool" accounting is used 11. Which of the following statements as most correr? (26) Acquiring firms have the largest positive abnormal returns b. Acquiring firms have the largest negative abnormal returns Target firms have the largest negative abnormal returns d. Target firms have very little change in return 12. Which of the following is a correct statement concerning the Williams Act? (26) The Williams Act mandates disclosure of holdings when more than 5% is acquired The Williams Act outlaws mergers among utilities The Waliams Act outlaws mergers among banks The Williams Act regulates holding companies once they acquire 20% of another company by requiring registration within two years The Williams Act regulates uses when they attempt acquire other utilities by requiring registration with the Federal Entry Regulatory Commid "FERC") e d