In a __, both firms cease to exist, and a new corporation is established with a new name, a new board, and/or a new management team. a. merger b. acquisition c. consolidation d. buyout ANSWER C
Date: September 19th, 2020
The ________ financing strategy requires a firm to pay interest on excess funds borrowed but not needed throughout the entire year. A) aggressive B) conservative C) permanent D) seasonal ANSWER B
Date: September 19th, 2020
In a __ the bidder’s intention is to acquire the target and replace the target’s incumbent management, who vigorously resist the attempt. a. merger b. acquisition c. buyout d. hostile takeover ANSWER D
Date: September 19th, 2020
A __ occurs when a group of individuals uses cash to purchase the shares of a firm and takes ownership and control of the firm. a. buyout b. acquisition c. consolidation d. merger ANSWER A
Date: September 19th, 2020
The aggressive financing strategy is a ________ method while the conservative financing strategy is a ________ method. A) high-profit, high-risk; low-profit, low-risk B) high-profit, low-risk; low-profit, high-risk C) low-profit, high-risk; high-profit, low-risk D) low-profit, low-risk; high-profit, high-risk ANSWER A
Date: September 19th, 2020
In a _ merger, two firms that heretofore have been competitors in the same line of business combine. a. conglomerate b. vertical c. diagonal d. horizontal ANSWER D
Date: September 19th, 2020
A _ merger occurs between two firms that had been doing business in different stages of the production process in a given industry. a. conglomerate b. vertical c. diagonal d. horizontal ANSWER B
Date: September 19th, 2020
In economic conditions characterized by short-term interest rates which exceed long-term interest rates, the financing strategy which would maximize profits is ________ strategy. A) the aggressive B) the conservative C) the trade-off D) a seasonal ANSWER B
Date: September 19th, 2020
A firm with a very low current ratio in comparison to the industry standard could lower the risk of unavailable short-term funds by moving toward ________ financing strategy. A) the aggressive B) the conservative C) a permanent D) a seasonal ANSWER B
Date: September 19th, 2020
A firm which uses the aggressive financing strategy plans to purchase a major fixed asset financed with a loan. The most likely consequence of this action is ________. A) a decrease in the current ratio B) an increase in net working capital C) a decrease in the risk of insolvency D) an increase in long-term […]
Date: September 19th, 2020
