Choose all that are not appropriate statements regarding business combinations and divestures. 1. A businesses that is in an industry where economies of scale is observed have an incentive to enlarge its operation through a merger. 2. A corporation is sometimes forced to divest a part of its business due to its excessive market power. 3. Two corporations that are planning to merge as equal partners should create a new legal entity (a "business combination") because that would be less costly than absorbing one corporation into another (an "absorption"). 4. A corporation seeking to acquire another corporation can do so by buying shares of the target through the open market. 5. The board of a corporation that have agreed to merge with another corporation should categorically reject a merger offer from another corporation because that would result in a breach of contract for the first merger agreement.
Choose all that are not appropriate statements regarding business combinations and divestures. 1. A businesses that is in an industry where economies of scale is observed have an incentive to enlarge its operation through a merger. 2. A corporation is sometimes forced to divest a part of its business due to its excessive market power. 3. Two corporations that are planning to merge as equal partners should create a new legal entity (a "business combination") because that would be less costly than absorbing one corporation into another (an "absorption"). 4. A corporation seeking to acquire another corporation can do so by buying shares of the target through the open market. 5. The board of a corporation that have agreed to merge with another corporation should categorically reject a merger offer from another corporation because that would result in a breach of contract for the first merger agreement.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 12QE
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