A legitimate means of averting an unintended transfer of wealth to cre

A legitimate means of averting an unintended transfer of wealth to creditors in a merger is to:

a. decrease leverage.
b. reduce the volatility of operating profits.
c. offer a guarantee to the separate firms’ creditors.
d. increase leverage.

11.According to the hypothesis, in an acquisition or a takeover the bidder’s management overvalues the target because they overestimate their ability to create value once they wrest control of the target’s assets.
a. humidor
b. hubris
c. humungous ego
d. haughty headquarters

ANSWER

B