Q1. Almont Oil Corp. is considering the acquisition of Toledo Fuels, Inc. Both f

Question

Q1.

Almont Oil Corp. is considering the acquisition of Toledo Fuels, Inc. Both firms are in the same industry. The management team of Almont Oil is outperforming its peer group, while the management team of Toledo Fuels is underperforming its peer group. Which of the following is likely to be true?

I. The shareholders of Almont Oil may view the acquisition unfavorably
II. The shareholders of Toledo Fuels will likely view the acquisition favorably
III. The key issue in this merger is likely to be financial synergy

Select one:

A. I only

B. II only

C. I and II only

D. I and III only

E. II and III only

F. I, II, and III

Q2.

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

Q3.

French Corp. has announced that it will seek to acquire Latin Corp., citing its belief that operating synergy will be created. French Corp.'s stock price declined on the announcement. Which of the following could be true concerning French Corp.'s management?

I. French Corp.'s management may be overly optimistic about the potential for the acquisition to create synergy
II. French Corp.'s management may simply be justifying the acquisition on the basis of synergy, but have other motives not being disclosed to shareholders
III. French Corp.'s management appears to have carefully considered the clientele and signaling effects of the announced acquisition attempt

Select one:

A. I only

B. II only

C. I and II only

D. I and III only

E. II and III only

F. I, II, and III

Explanation / Answer

1 Answer :- C. I and II only

2 Answer :- D. II and III only

3 Answer :- B. II only

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.