Reference no: EM132984934

Problem 1: All of the following are common motives for a merger or acquisition except for:

a. Buying undervalued assets
b. Financial synergy
c. Raising the cost of capital
d. Operating synergy

Problem 2: Companies may vertically integrate

a. Create operating synergy
b. All of these are correct
c. To be assured of a dependable source of supply
d. Create financial synergy

Problem 3: Synergy values are the additional values that companies realize through a merge and acquisition, Synergy values can take three forms. Generally speaking, the most significant and common form of synergy is:

a. Lower expenses and cost
b. Lower cost of Capital
c. Higher production efficiencies
d. Higher cost of capital