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Question
Assume Firm As acquisition of Firm B results in a reduction in the combined firms debt-to-total capital ratio to .25. If the same ratio for the industry is .5, the combined firm may be able to increase its borrowing to the industry average, assuming no extenuating circumstances. However, this should not be viewed as a source of value to the acquiring firm. True or False
Answer
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Related questions
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Management may sell assets to fund diversification opportunities? True or False
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A joint venture is rarely an independent legal entity such as a corporation or partnership.
True or False
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Give examples of how the partners objectives differ.
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Which of the following is true about integration planning? Without integration planning, integration is not likely to
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c. Proceed without significant disruption to the acquirers operations
d. Be completed without experiencing substantial customer attrition
e. All of the above
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Which of the following is not typically true of post-closing evaluation of an acquisition?
a. It is important not to change the performance benchmarks against which the acquisition is measured
b. It is critical to ask the tough questions
c. It is an opportunity to learn from mistakes
d. It is commonly done
e. It is frequently avoided by acquiring firms because of the potential for embarrassment.