BUSA Ch 7 Exam 2026 Questions and
Answers
Horizontal acquisitions in the airline industry, such as that between American West
Airlines and U.S. Airways are typically intended to:
a.
take advantage of innovations created by the other firm.
b.
reduce some of the overcapacity in the industry.
c.
control more parts of the value chain.
d.
overcome barriers to entry. - Correct answer-B
Chinese firms seeking to acquire U.S. firms are interested in all of the following
EXCEPT
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,a.
gaining access to the U.S. company brand names.
b.
gaining access to critical resources held by U.S. companies.
c.
diversifying into unrelated industries in order to broaden their market scope.
d.
acquiring relationships with dealers through horizontal acquisitions. - Correct
answer-C
Researchers have found that shareholders of acquired firms often
a.
earn above-average returns.
b.
earn below-average returns.
c.
earn close to zero as a result of the acquisi-tion.
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,d.
are not affected by the acquisition. - Correct answer-A
Company experience and research findings have shown acquisitions typically ____
for the acquiring firm.
a.
result in above-average returns
b.
provide approximately average returns
c.
result in returns near zero
d.
take some time to achieve private synergy, but eventually result in above-average
returns - Correct answer-C
Claude holds a large number of shares of Bayou Beauty, a regional brewing
company that is considered a likely takeover target by a major international brewer.
It would probably be in Claude's financial interest if Bayou Beauty's owners
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, a.
resisted selling at any price.
b.
sold the company to the larger brewer.
c.
designed a poison pill to discourage a takeover.
d.
looked for smaller brewers to acquire instead of selling to the larger brewer. -
Correct answer-B
In a merger
a.
one firm buys controlling interest in another firm.
b.
two firms agree to integrate their operations on a relatively coequal basis.
c.
two firms combine to create a third separate entity.
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Answers
Horizontal acquisitions in the airline industry, such as that between American West
Airlines and U.S. Airways are typically intended to:
a.
take advantage of innovations created by the other firm.
b.
reduce some of the overcapacity in the industry.
c.
control more parts of the value chain.
d.
overcome barriers to entry. - Correct answer-B
Chinese firms seeking to acquire U.S. firms are interested in all of the following
EXCEPT
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,a.
gaining access to the U.S. company brand names.
b.
gaining access to critical resources held by U.S. companies.
c.
diversifying into unrelated industries in order to broaden their market scope.
d.
acquiring relationships with dealers through horizontal acquisitions. - Correct
answer-C
Researchers have found that shareholders of acquired firms often
a.
earn above-average returns.
b.
earn below-average returns.
c.
earn close to zero as a result of the acquisi-tion.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,d.
are not affected by the acquisition. - Correct answer-A
Company experience and research findings have shown acquisitions typically ____
for the acquiring firm.
a.
result in above-average returns
b.
provide approximately average returns
c.
result in returns near zero
d.
take some time to achieve private synergy, but eventually result in above-average
returns - Correct answer-C
Claude holds a large number of shares of Bayou Beauty, a regional brewing
company that is considered a likely takeover target by a major international brewer.
It would probably be in Claude's financial interest if Bayou Beauty's owners
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, a.
resisted selling at any price.
b.
sold the company to the larger brewer.
c.
designed a poison pill to discourage a takeover.
d.
looked for smaller brewers to acquire instead of selling to the larger brewer. -
Correct answer-B
In a merger
a.
one firm buys controlling interest in another firm.
b.
two firms agree to integrate their operations on a relatively coequal basis.
c.
two firms combine to create a third separate entity.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
