Question

Which of the following statements concerning mergers and acquisitions is true?
I. Mergers of firms of equal size usually have better outcomes than mergers of firms of different sizes
II. Acquisitions of small private firms usually result in better outcomes than acquisitions of public firms
III. Growth-based mergers are usually less successful than cost-based mergers

Select one:

a.  I only

b.  I and II only

c. I and III only

d. II and III only

e.  I, II, and III

Tredway Corp. has announced it will attempt a takeover of Capstone Inc. The management of Capstone opposes this takeover. Capstone has seen its stock price increase in value following the announcement. What can we conclude about this takeover effort?

I. The markets believe that the takeover is unlikely to create value
II. Capstone shareholders have a favorable view of the takeover
III. Capstone probably does not have a strong anti-takeover amendment in its corporate charter

Select one:

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II, and III

F. None of the above

Answer 1

1-b i and 1 1only since mergers of eequal size firms have better compatibility in operations and capital structures and aquisition of small private firms is better than aquistion of large publicly firm which arehighyl regulated with lots of compliances and procedural aspects unlike private firms which can easily be moulded as per our requirement and hence can provide more fruitful results.growth based firms are no way less succesfful than cost based mergers.

2-d ie 2 &3 only since market strongly favours this takeover which is believed to create shareholders value and yes there is no proper anti takeover amedment in the corporate chartere if capstone thus it is unable to oppose it.