Mergers and Acquisitions Quiz

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Questions and Answers

An acquisition describes one company taking over another and establishing itself as the new owner, the purchase is called a(n) ______

acquisition

A merger describes two firms, of approximately the same size, that join forces to move forward as a single new entity, rather than remain separately owned and operated. This action is known as a(n) ______ of equals.

merger

The term mergers and acquisitions (M&A) - refers to the consolidation of companies or their major business assets through financial transactions between companies. A company may purchase and absorb another company outright, merge with it to create a new company, acquire some or all of its major assets, make a tender offer for its stock, or stage a(n) ______ takeover.

hostile

A tender offer is a public solicitation to all shareholders requesting that they tender their stock for sale at a specific price during a certain time. The tender offer typically is set at a higher price per share than the company's current stock price, providing shareholders a greater incentive to sell their shares. All are M&A ______.

<p>activities</p> Signup and view all the answers

When one company takes over another and establishes itself as the new owner, the purchase is called an ______

<p>acquisition</p> Signup and view all the answers

When one company takes over another and establishes itself as the new owner, the purchase is called an _______

<p>acquisition</p> Signup and view all the answers

_______ and acquisitions are often used interchangeably, however, they have slightly different meanings. When one company takes over another and establishes itself as the new owner, the purchase is called an acquisition. A merger describes two firms, of approximately the same size, that join forces to move forward as a single new entity, rather than remain separately owned and operated. This action is known as a _______ of equals.

<p>mergers</p> Signup and view all the answers

A tender offer is a public solicitation to all shareholders requesting that they tender their stock for sale at a specific price during a certain time. The tender offer typically is set at a higher price per share than the company's current stock price, providing shareholders a greater incentive to sell their shares. All are M&A _______.

<p>activities</p> Signup and view all the answers

A company may purchase and absorb another company outright, merge with it to create a new company, acquire some or all of its major assets, make a tender offer for its stock, or stage a _______ takeover. All are M&A activities.

<p>hostile</p> Signup and view all the answers

The term _______ refers to the consolidation of companies or their major business assets through financial transactions between companies.

<p>mergers</p> Signup and view all the answers

Flashcards

Acquisition

One company taking over another company and becoming the new owner.

Merger

Two similar-sized companies joining forces to form a new single entity.

Mergers and Acquisitions (M&A)

Combining companies through financial transactions, like buying, merging, or acquiring assets.

Hostile Takeover

Taking over a company when management opposes the takeover.

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Tender Offer

Public offer to shareholders to sell their stock at a higher price than current stock price.

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M&A Activities

Various financial transactions involved in combining companies.

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Merger of equals

Two companies of similar size joining to create a new entity.

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Acquisition

One company taking over another company, establishing itself as the new owner.

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Mergers

Combining companies with approximately the same size.

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Financial transactions

Deals involved in buying, merging, or acquiring assets of businesses.

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Study Notes

Mergers and Acquisitions (M&A)

  • An acquisition occurs when one company takes over another and establishes itself as the new owner.
  • A merger describes two firms of approximately the same size joining forces to move forward as a single new entity.

Types of M&A

  • Acquisition: one company takes over another and establishes itself as the new owner.
  • Merger: two firms of approximately the same size joining forces to move forward as a single new entity.
  • Tender offer: a public solicitation to all shareholders requesting that they tender their stock for sale at a specific price during a certain time.
  • Hostile takeover: a company takes over another despite the target company's resistance.

M&A Activities

  • Purchase and absorb another company outright.
  • Merge with another company to create a new company.
  • Acquire some or all of another company's major assets.
  • Make a tender offer for another company's stock.
  • Stage a hostile takeover.

Key Terms

  • Consolidation of companies or their major business assets through financial transactions between companies is referred to as M&A.
  • Merger of equals: two firms of approximately the same size joining forces to move forward as a single new entity.

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