BUSI 4940 Exam 3 Questions with Correct Answers 100% Verified by Experts| 2025/2026
Latest Update
Corporate level is concerned with Diversification
Merger 2 firms agree to integrate their operations on a relatively co-equal basis to create
another NEW firm
Acquisition One firm buys a controlling (100% interest) in another firm with the intent of
making the acquired firm a subsidiary business w/in its portfolio (amazon buying whole foods)
Takeover Acquisition in which the target firm did not solicit the acquiring firm's bid for
outright ownership
Increased Market Power occurs when: ability to sell goods above competitive levels, costs of
activities below competitors, a firm's size
Acquisitions intended to increase market power are subject to: Regulatory review and
analysis by financial markets
Market power is increased by: Horizontal acquisitions, Vertical Acquisitions, Related
acquisitions
Entry Barriers factors associated w a company's ability to engage immediate access in a
specific market
Cross-Border Acquisitions acquisitions made between firms with headquarters in different
countries
Firms acquire (buy) because: cost of new product development is high, desire an increased
speed to enter product market (FB buying Insta)
, Lower risk compared to Developing new products managers view acquisitions as low risk,
acquisitions discourgae innovation
All diversification can be implemented through acquisitions and ____ risk mitigate
An acquisition can: (reshaping firm's competitive scope) reduce negative effect of an intense
rivalry, reduce a firm's dependence
Learning & Develop New capabilities to: build their own knowledge base, gain capabilities
the firm doesn't already possess
Integration challenges include: melding two disparate corp cultures, resolve problems
regarding the status of the newly acquired firm's executives
Due Diligence process of evaluating a target firm for acquisition
Evaluation requires examining: Financing of intended transaction, differences in culture
between firms, tax consequences of transactions
Large Amounts of Debt can: Increase likelihood of bankruptcy, lead to a downgrade of firm's
credit rating, preclude investment in activities that contribute to firm's long-term success
Synergy When assets are worth more when used in conjunction with each other than when
they are used separately (1+1=3)
Private Synergy idea of a perfect match
Latest Update
Corporate level is concerned with Diversification
Merger 2 firms agree to integrate their operations on a relatively co-equal basis to create
another NEW firm
Acquisition One firm buys a controlling (100% interest) in another firm with the intent of
making the acquired firm a subsidiary business w/in its portfolio (amazon buying whole foods)
Takeover Acquisition in which the target firm did not solicit the acquiring firm's bid for
outright ownership
Increased Market Power occurs when: ability to sell goods above competitive levels, costs of
activities below competitors, a firm's size
Acquisitions intended to increase market power are subject to: Regulatory review and
analysis by financial markets
Market power is increased by: Horizontal acquisitions, Vertical Acquisitions, Related
acquisitions
Entry Barriers factors associated w a company's ability to engage immediate access in a
specific market
Cross-Border Acquisitions acquisitions made between firms with headquarters in different
countries
Firms acquire (buy) because: cost of new product development is high, desire an increased
speed to enter product market (FB buying Insta)
, Lower risk compared to Developing new products managers view acquisitions as low risk,
acquisitions discourgae innovation
All diversification can be implemented through acquisitions and ____ risk mitigate
An acquisition can: (reshaping firm's competitive scope) reduce negative effect of an intense
rivalry, reduce a firm's dependence
Learning & Develop New capabilities to: build their own knowledge base, gain capabilities
the firm doesn't already possess
Integration challenges include: melding two disparate corp cultures, resolve problems
regarding the status of the newly acquired firm's executives
Due Diligence process of evaluating a target firm for acquisition
Evaluation requires examining: Financing of intended transaction, differences in culture
between firms, tax consequences of transactions
Large Amounts of Debt can: Increase likelihood of bankruptcy, lead to a downgrade of firm's
credit rating, preclude investment in activities that contribute to firm's long-term success
Synergy When assets are worth more when used in conjunction with each other than when
they are used separately (1+1=3)
Private Synergy idea of a perfect match
