It is true that vertical integration involves the competitor

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Reference no: EM1310495

True (or) False questions on mergers.

1. Vertical integration involves the acquisition of competitors.

a. True

b. False

2. Synergy is a common motive for mergers.

a. True

b. False

3. Management and shareholder's viewpoints may diverge about the desirability of a takeover, because while management may wish to maintain their autonomy and perhaps keep their jobs, stockholders may wish to get the highest price possible for their holdings.

a. True

b. False

4. Goodwill created under the purchase of assets method may now remain on the books of the acquiring firm, and does not have to be written off against future earnings per share.

a. True

b. False

5. A takeover tender offer is a company's attempt to acquire a target firm against its will.

a. True

b. False

6. 16.In addition to the normal risks that a domestic firm faces (such as the risk associated with maintaining sales and market share, the financial risk of too much leverage, etc.), the foreign affiliate of a multinational firm is exposed to foreign exchange risk and political risk.

a. True

b. False

7. Which factor(s) affect(s) foreign exchange rates?

a. Inflation

b. Interest rates

c. Balance of payments

d. All of the above

8. The forward exchange rate is the exchange rate at which the currency is traded for immediate delivery.

a. True

b. False

9. LIBOR (London Interbank Offered Rate) is an interbank rate applicable for large deposits in the Eurodollar market.

a. True

b. False

10. The best approach to protection against political risk is to thoroughly investigate the country's political stability long before a company makes any investment in that country, according to the text.

a. True

b. False

Reference no: EM1310495

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