Which statement is true of acquisitions?Multiple choice question.They help preempt competitors. They create more value rather than destroy it.They are more risky compared to greenfield ventures.They cannot be easily executed.
Question
Which statement is true of acquisitions?Multiple choice question.They help preempt competitors. They create more value rather than destroy it.They are more risky compared to greenfield ventures.They cannot be easily executed.
Solution
The statement that is true of acquisitions is: "They are more risky compared to greenfield ventures."
Here's why:
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"They help preempt competitors." - This can be true in some cases, but it's not a universal truth about acquisitions. It depends on the specific circumstances of the acquisition.
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"They create more value rather than destroy it." - Again, this can be true in some cases, but it's not always the case. Some acquisitions can lead to a loss of value if they are not managed properly.
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"They are more risky compared to greenfield ventures." - This is generally true. Acquisitions involve integrating two existing companies, which can be complex and risky. Greenfield ventures, on the other hand, involve starting a new operation from scratch, which can be less risky because there are fewer unknown variables.
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"They cannot be easily executed." - This statement is too absolute. While acquisitions can be complex and challenging, they can still be executed with proper planning and management.
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True or false: In most cases, mergers and acquisitions create competitive advantage.True false question.True
Which of the following is true of firms' acquisition and integration capabilities?Multiple choice question.Most firms are able to create shareholder value through mergers and acquisitions.Few firms are unable to create significant shareholder value through mergers and acquisitions.Some firms can consistently use mergers and acquisitions to increase their competitive advantage.
Which of the following statements regarding merger deal(s) is (are) TRUE?Select one or more alternatives:If the premium paid by the bidder exceeds the expected additional value to be created through the merger, the bidder's share price is likely to drop on the announcement of the bid.Synergies are by far the most common justification that bidders give for the premium they pay for a target.A bidder can often acquire a public-listed company for less than its current market value.Merger activity is greater during economic contractions than during expansions.
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