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BUSA 4980 Exam 2 with Questions and Answers, Exams of Business Administration

BUSA 4980 Exam 2 with Questions and Answers What do we know about M & A's? ANSWER -Deals, in general, are more likely to destroy value than create value -Studies show that more than 50% of M&As fail -Employee turnover for the acquired firm increases significantly within the following year Due diligence ANSWER -The process of evaluating a target firm for acquisition. -Ineffective due diligence may result in paying an excessive premium for the target company winner's curse ANSWER the most optimistic bidder usually over-estimates the true value of the firm increased market power ANSWER M&As can be used to counteract competitive forces in the industry (according to five forces model) market power is increased by: ANSWER -acquisitions of competitors in the same industry -vertical acquisitions of suppliers or distributors of the acquiring firm. -Acquisition of substitute producers entry barriers ANSWER Factors associated with the market or with the firms operating in it

Typology: Exams

2024/2025

Available from 01/01/2025

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BUSA 4980 Exam 2 with Questions and Answers ‘What do we know about M & A's? ANSWER -Deals, in general, are more likely to destroy value than creale value -Studies show that more than 50% of M&As fail -Employee turnover for the acquired firm increases significantly within the following year Due diligence ANSWER -The process of evaluating a target firm for acquisition. -Inellective due diligence may result in paying an excessive premium [or the target company winner's curse ANSWER the most optimistic bidder usually over-cstimates the truce value of the firm increased market power ANSWER M&As can be used to counteract competitive forces in the industry (according to five forces model) market power is increased by: ANSWER -acquisilions of competitors in the same industry -vertical acquisitions of suppliers or distributors of the acquiring firm. -Acquisilion of substitute producers entry barricrs ANSWER Factors associated with the market or with the firms operating in it that increase the expense and difficulty for new firms in gaining immediate market access. -economies of scale -diflerentiated products