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| 1 | |
Most acquisitions end up destroying value rather than creating it. |
| | A) | True |
| | B) | False |
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| 2 | |
Acquisitions in the oil industry, such as the British Petroleum purchases of Amoco and Arco, are performing well as is the Exxon-Mobil merger. This illustrates that not all diversification moves, including those involving mergers and acquisitions, erode performance. |
| | A) | True |
| | B) | False |
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| 3 | |
When Shaw Industries, a giant carpet manufacturer, increased its control over raw materials by producing much of its own polypropylene fiber, it was using related diversification to achieve value by integrating vertically in order to acquire market power. |
| | A) | True |
| | B) | False |
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| 4 | |
Related diversification does not enable a firm to benefit from economies of scope. |
| | A) | True |
| | B) | False |
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| 5 | |
According to the text, corporate restructuring includes management restructuring, ______ restructuring, and _____ restructuring. |
| | A) | asset and technology |
| | B) | capital and asset |
| | C) | financial and procurement |
| | D) | capital and technology |
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| 6 | |
Divesting of businesses can accomplish many different objectives, including enabling managers to focus their efforts more directly on the core business of the firm. |
| | A) | True |
| | B) | False |
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| 7 | |
In 2010, Apple acquired Siri Inc. so that they could quickly fully integrate the Siri natural language voice recognition software into iOS, the Apple proprietary operating system. This illustrates how important speed is in the consideration of mergers and acquisitions for high-technology and knowledge-intensive industries. |
| | A) | True |
| | B) | False |
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| 8 | |
When a company is threatened by an impending takeover, it might use a poison pill to buy stock back from the hostile company at a higher price than the unfriendly company paid for it. |
| | A) | True |
| | B) | False |
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| 9 | |
Companies use prearranged management contracts known as golden parachutes to assure that in the event of a hostile takeover their jobs will be protected. |
| | A) | True |
| | B) | False |
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| 10 | |
When a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it, they are using _______________. |
| | A) | greenmail |
| | B) | golden parachute |
| | C) | poison pill |
| | D) | scorched earth |
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