international corporate finance
Chapter 025 Mergers and Acquisitions
Multiple Choice Questions
1. The complete absorption of one company by another, wherein the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity, is called a:
A. merger.
b. consolidation.
c. tender offer.
d. spinoff.
e. divestiture.
SECTION: 25.1
TOPIC: MERGER
TYPE: DEFINITIONS
2. A merger in which an entirely new firm is created and both the acquired and acquiring firms cease to exist is called a:
a. divestiture.
B. consolidation.
c. tender offer.
d. spinoff.
e. conglomeration.
SECTION: 25.1
TOPIC: CONSOLIDATION
TYPE: DEFINITIONS
3. A public offer by one firm to directly buy the shares of another firm is called a:
a. merger.
b. consolidation.
C. tender offer.
d. spinoff.
e. divestiture.
SECTION: 25.1
TOPIC: TENDER OFFER
TYPE: DEFINITIONS
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25-1
Chapter 025 Mergers and Acquisitions
4. An attempt to gain control of a firm by soliciting a sufficient number of stockholder votes to replace existing management is called a:
a. tender offer.
B. proxy contest.
c. going-private transaction.
d. leveraged buyout.
e. consolidation.
SECTION: 25.1
TOPIC: PROXY CONTEST
TYPE: DEFINITIONS
5. A business deal in which all publicly owned stock in a firm is replaced with complete equity ownership by a private group is called a:
a. tender offer.
b. proxy contest.
C. going-private transaction.
d. leveraged buyout.
e. consolidation.
SECTION: 25.1
TOPIC: GOING-PRIVATE TRANSACTION
TYPE: DEFINITIONS
6. Going-private transactions in which a large percentage of the money used to buy the outstanding stock is borrowed is called a:
a. tender offer.
b. proxy contest.
c. merger.
D. leveraged buyout.
e. consolidation.
SECTION: 25.1
TOPIC: LEVERAGED BUYOUT
TYPE: DEFINITIONS
www.sudanpoint.com/mba
25-2
Chapter 025 Mergers and Acquisitions
7. An agreement between firms to cooperate in pursuit of a joint
Multiple Choice Questions
1. The complete absorption of one company by another, wherein the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity, is called a:
A. merger.
b. consolidation.
c. tender offer.
d. spinoff.
e. divestiture.
SECTION: 25.1
TOPIC: MERGER
TYPE: DEFINITIONS
2. A merger in which an entirely new firm is created and both the acquired and acquiring firms cease to exist is called a:
a. divestiture.
B. consolidation.
c. tender offer.
d. spinoff.
e. conglomeration.
SECTION: 25.1
TOPIC: CONSOLIDATION
TYPE: DEFINITIONS
3. A public offer by one firm to directly buy the shares of another firm is called a:
a. merger.
b. consolidation.
C. tender offer.
d. spinoff.
e. divestiture.
SECTION: 25.1
TOPIC: TENDER OFFER
TYPE: DEFINITIONS
www.sudanpoint.com/mba
25-1
Chapter 025 Mergers and Acquisitions
4. An attempt to gain control of a firm by soliciting a sufficient number of stockholder votes to replace existing management is called a:
a. tender offer.
B. proxy contest.
c. going-private transaction.
d. leveraged buyout.
e. consolidation.
SECTION: 25.1
TOPIC: PROXY CONTEST
TYPE: DEFINITIONS
5. A business deal in which all publicly owned stock in a firm is replaced with complete equity ownership by a private group is called a:
a. tender offer.
b. proxy contest.
C. going-private transaction.
d. leveraged buyout.
e. consolidation.
SECTION: 25.1
TOPIC: GOING-PRIVATE TRANSACTION
TYPE: DEFINITIONS
6. Going-private transactions in which a large percentage of the money used to buy the outstanding stock is borrowed is called a:
a. tender offer.
b. proxy contest.
c. merger.
D. leveraged buyout.
e. consolidation.
SECTION: 25.1
TOPIC: LEVERAGED BUYOUT
TYPE: DEFINITIONS
www.sudanpoint.com/mba
25-2
Chapter 025 Mergers and Acquisitions
7. An agreement between firms to cooperate in pursuit of a joint