When the target firm does not solicit the acquiring firm's bid, it is referred to as a(n)

a. stealth raid.

b. adversarial acquisition.

c. takeover or unfriendly acquisition.

d. leveraged buyout.

Answer: takeover or unfriendly acquisition.

Currently, the rationale for making an acquisition includes each of the following EXCEPT

a. to increase market power.

b. to decrease taxes paid by shareholders.

c. to overcome entry barriers.

d. to increase diversification.

Answer: to decrease taxes paid by shareholders.

Market power is derived primarily from the

a. core competencies of the firm.

b. size of a firm and its resources and capabilities.

c. quality of a firm's top management team.

d. depth of a firm's strategy.

Answer: size of a firm and its resources and capabilities.

The March 2011 announcement that AT&T was acquiring T-Mobile USA from Deutsche Telekom is a _____ acquisition and is intended to

a. vertical; increase diversification.

b. horizontal; increase market power.

c. vertical; overcome entry barriers.

d. related; increase speed to market.

Answer: horizontal; increase market power.

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

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.

Answer: sold the company to the larger brewer.

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.

d. one firm breaks into two firms.

Answer: two firms agree to integrate their operations on a relatively coequal basis.