Chapter 7—Acquisition and Restructuring Strategies
TRUE/FALSE
1. Evidence suggests that acquisitions usually lead to favorable financial
outcomes, especially for the acquiring firm.
5. Takeovers are unsolicited and unwanted acquisitions which are uniformly
hostile.
6. An acquisition occurs when one firm buys a controlling interest in another
firm and the acquired firm becomes a subsidiary business. 7. Most acquisitions that are designed to achieve greater market power entail
buying a competitor, a supplier, a distributor, or a business in a highly related industry.
9. An acquisition of a firm in a highly related industry is referred to as
a horizontal acquisition. 12. A related acquisition involves two firms in the same industry. 14. The lower the barriers to entry, the more likely firms will use acquisition
as a means to enter a market. 17. Firms can increase their speed to market for new products by pursuing an
internal product development strategy rather than an acquisition strategy. 19. The quickest and easiest way for a firm to diversify its portfolio of
businesses is to make acquisitions. 26. Junk bonds are financial instruments commonly used to finance risky
acquisitions that provide potential high returns for the bondholders. 27. Synergy is created by the efficiencies derived from economies of scale
and economies of scope and by sharing resources across the businesses in the merged firm. 30. Transaction costs resulting from an acquisition refer to the direct and
indirect costs resulting from the use of acquisition strategies to create synergies. 33. Top managers typically become overly focused on acquisitions because only
they can perform most of the tasks involved, such as performing due diligence on the target firm. 36. One of the potential problems associated with acquisitions is that the
size of the firm may exceed the economies of scale generated by the acquisition. 37. One of the most effective ways to test the feasibility of a future merger
or acquisition is for the firms to first engage in a strategic alliance. 45. Downscoping makes management of the firm more effective because it allows
the top management team to better understand the remaining businesses.
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MULTIPLE CHOICE
1. Cross-border acquisitions involve
a. acquisitions by firms from developing countries of firms in developed countries.
b. acquisitions by firms from developed countries of firms in developing countries.
c. acquisitions made by firms both within and between developed and developing countries. d. none of the above.
5. Currently, the rationale for making an acquisition includes each of the
following EXCEPT
a. to increase market power.
b. to decrease taxes paid by shareholders. c. to increase financial performance.
d. to shift a core business into different market. 7. In a merger
a. one firm buys controlling interest in another firm.
b. two firms agree to integrate their operations on a relatively coequal basis.
c. two firms combine to create a third separate entity. d. one firm breaks into two firms. 8. There are few true mergers because
a. few firms have complementary resources.
b. integration problems are more severe than in outright acquisitions.
c. one firm usually dominates in terms of market share or firm size. d. of managerial resistance. True mergers result in significant managerial-level layoffs.
9. A(an) ____ occurs when one firm buys a controlling, or 100% interest, in
another firm. a. merger
b. acquisition c. spin-off
d. restructuring 12. Two existing U.S. airlines, American West Airlines and U.S. Airways, have
merged. The purpose of this merger is most likely to ____ and constitutes ____ action.
a. increased diversification; vertical b. increase market power; horizontal c. overcome entry barriers; vertical
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d. increase speed to market; related 14. When a firm acquires its supplier, it is engaging in a(an)
a. merger.
b. unrelated acquisition. c. hostile takeover.
d. vertical acquisition. 19. Cross-border acquisitions are typically made to
a. increase a firm’s market power.
b. reduce the cost of new product development.
c. take advantage of higher education levels of labor in developed countries.
d. circumvent barriers to entry in another country. 27. Entering new markets through acquisitions of companies with new products
is not risk-free, especially if acquisition becomes a substitute for a. market discipline. b. innovation. c. risk analysis.
d. international diversification. 28. Compared to internal product development, acquisitions allow
a. immediate access to innovations in mature product markets. b. more accurate prediction of return on investment. c. slower market entry.
d. more effective use of company core competencies. 30. When a firm is overly dependent on one or more products or markets, and
the intensity of rivalry in that market is intense, the firm may wish to ____ by making an acquisition.
a. increase new product speed to market b. broaden its competitive scope c. increase its economies of scale d. overcome entry barriers 33. Each of the following is a rationale for acquisitions EXCEPT
a. achieving greater market power.
b. overcoming significant barriers to entry. c. increasing speed of market entry.
d. positioning the firm for a tactical competitive move. 36. The factors that lead to poor long-term performance by acquisitions
include all of the following EXCEPT firms a. with insufficient diversification. b. having too much debt.
c. being unable to achieve synergy.
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战略管理第七章作业word精品文档6页
