BUSI 4940 EXAM 3 2025/2026 QUESTIONS
AND ANSWERS 100% PASS
Corporate level is concerned with - ANS Diversification
Merger - ANS 2 firms agree to integrate their operations on a relatively co-equal basis to
create another NEW firm
Acquisition - ANS 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 - ANS Acquisition in which the target firm did not solicit the acquiring firm's bid for
outright ownership
Increased Market Power occurs when: - ANS 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: - ANS Regulatory review and
analysis by financial markets
Market power is increased by: - ANS Horizontal acquisitions, Vertical Acquisitions, Related
acquisitions
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Entry Barriers - ANS factors associated w a company's ability to engage immediate access in
a specific market
Cross-Border Acquisitions - ANS acquisitions made between firms with headquarters in
different countries
Firms acquire (buy) because: - ANS 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 - ANS managers view acquisitions as low
risk, acquisitions discourgae innovation
All diversification can be implemented through acquisitions and ____ risk - ANS mitigate
An acquisition can: (reshaping firm's competitive scope) - ANS reduce negative effect of an
intense rivalry, reduce a firm's dependence
Learning & Develop New capabilities to: - ANS build their own knowledge base, gain
capabilities the firm doesn't already possess
Integration challenges include: - ANS melding two disparate corp cultures, resolve problems
regarding the status of the newly acquired firm's executives
Due Diligence - ANS process of evaluating a target firm for acquisition
Evaluation requires examining: - ANS Financing of intended transaction, differences in
culture between firms, tax consequences of transactions
Large Amounts of Debt can: - ANS 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
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
AND ANSWERS 100% PASS
Corporate level is concerned with - ANS Diversification
Merger - ANS 2 firms agree to integrate their operations on a relatively co-equal basis to
create another NEW firm
Acquisition - ANS 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 - ANS Acquisition in which the target firm did not solicit the acquiring firm's bid for
outright ownership
Increased Market Power occurs when: - ANS 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: - ANS Regulatory review and
analysis by financial markets
Market power is increased by: - ANS Horizontal acquisitions, Vertical Acquisitions, Related
acquisitions
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Entry Barriers - ANS factors associated w a company's ability to engage immediate access in
a specific market
Cross-Border Acquisitions - ANS acquisitions made between firms with headquarters in
different countries
Firms acquire (buy) because: - ANS 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 - ANS managers view acquisitions as low
risk, acquisitions discourgae innovation
All diversification can be implemented through acquisitions and ____ risk - ANS mitigate
An acquisition can: (reshaping firm's competitive scope) - ANS reduce negative effect of an
intense rivalry, reduce a firm's dependence
Learning & Develop New capabilities to: - ANS build their own knowledge base, gain
capabilities the firm doesn't already possess
Integration challenges include: - ANS melding two disparate corp cultures, resolve problems
regarding the status of the newly acquired firm's executives
Due Diligence - ANS process of evaluating a target firm for acquisition
Evaluation requires examining: - ANS Financing of intended transaction, differences in
culture between firms, tax consequences of transactions
Large Amounts of Debt can: - ANS 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
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
