Business English >> Advanced Vocabulary >> Mergers & Acquisitions Multiple Choice
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Advanced Vocabulary
Mergers & Acquisitions Multiple Choice - Answer Sheet
1. A merger occurs when two companies combine to form a new entity, and both cease to exist as separate businesses. True
2. In an acquisition, the acquiring company often retains the name of the company it purchases. False
3. Horizontal mergers occur between companies operating in the same industry and at the same stage of production. True
4. A hostile takeover happens when the acquiring company seeks to purchase the target company without the approval of its board of directors. True
5. Synergies in mergers often refer to the cost savings or revenue enhancements that result from combining companies. True
6. Acquisitions are always seen as friendly, with both companies agreeing to the terms of the purchase. False
7. Vertical mergers occur between companies operating at different stages of the production process, such as a manufacturer merging with a supplier. True
8. A leveraged buyout (LBO) uses a company's cash reserves to finance the acquisition. False
