41.
Which of the following is an example of a vertical merger?
A
A retailer acquiring a supplier
B
Two banks merging
C
A technology firm acquiring a competitor
D
A pharmaceutical firm buying another pharmaceutical firm
Loading practice questions
50 practice sets · Page 3 of 3
Which of the following is an example of a vertical merger?
A retailer acquiring a supplier
Two banks merging
A technology firm acquiring a competitor
A pharmaceutical firm buying another pharmaceutical firm
What is "synergy" in the context of mergers and acquisitions?
Increased market competition
The combined value of the two companies being greater than the sum of their individual values
A reduction in the number of employees
A strategy to increase revenue per unit
In a stock-for-stock acquisition, the acquiring company gives the target company:
Cash
Its own shares
A loan
Assets
What is a "friendly" acquisition?
When both companies agree to the merger
When the acquirer forces the target company to sell
When the target company doesn't know about the acquisition
When the acquisition leads to layoffs
Which of the following is a horizontal merger?
Two firms in the same industry combine
One firm acquires another in a different industry
Two firms in different regions combine
One firm buys a smaller firm
What does due diligence in M&A typically involve?
Financial audit of the target
Market research of competitors
Regulatory compliance check
All of the above
Which of the following is NOT a typical reason for mergers and acquisitions?
Expanding product portfolio
Achieving economies of scale
Reducing competition
Decreasing market share
In an acquisition, the acquiring company is known as the:
Target company
Bidder company
Acquirer company
Combined company
What type of acquisition strategy involves the acquisition of companies in related industries?
Horizontal integration
Vertical integration
Conglomerate acquisition
Cross-border acquisition
What is the main objective of a merger?
Increase market share
Reduce operational costs
Enhance product diversity
All of the above