Question 1

Explain the purpose of antitakeover tactics and provide a specific example of an actual antitakeover tactic.

Accepted Answer

Feedback: Unfriendly or hostile takeovers can occur when the company stock becomes undervalued.A competing organization can buy the outstanding stock of a takeover candidate in sufficient quantity to become a large shareholder.Then it makes a tender offer to gain full control of the company.If the shareholders accept the offer,the hostile firm buys the target company and either fires the target firm management team or strips the team members of their power.Thus,antitakeover tactics are common,including greenmail,golden parachutes,and poison pills.

Question 2

Many leading high-tech firms such as Google,Apple,and Intel have dramatically enhanced their revenues,profits,and market values through a wide variety of diversification initiatives.Which of the following is not such an initiative?

Accepted Answer

A)   acquisitions
B)   strategic alliances
C)   stockholder enhancement
D)   joint venturesE) None of the above
F) B) and C)

Question 3

Divesting of businesses can accomplish many different objectives,except

Accepted Answer

A)   enabling managers to focus their efforts more directly on the core businesses of the firm.
B)   providing the firm with more resources to spend on more attractive alternatives.
C)   raising cash to help fund existing businesses.
D)   dispersing manager focus.E) A) and D)
F) A) and C)

Question 4

Which of the following is not part of a good guideline list for managing strategic alliances?

Accepted Answer

A)   establishing a clear understanding between partners
B)   not shortchanging your partner
C)   relying primarily on a contract to make the joint venture work
D)   working hard to ensure a collaborative relationship between partnersE) B) and C)
F) A) and D)

Question 5

Portfolio management matrices are applied to what level of strategy?

Accepted Answer

A)   departmental level
B)   business level
C)   corporate level
D)   international levelE) B) and D)
F) B) and C)

Question 6

Research shows that most acquisitions of public corporations result in value creation rather than value destruction.

Accepted Answer

A) True 
 B)False

Question 7

Polaris,a manufacturer of snowmobiles,motorcycles,watercraft,and off-road vehicles,shares manufacturing operations across its businesses.It also has a corporate research and development facility and staff departments that support all the Polaris operating divisions.This is an example of creating value by using

Accepted Answer

A)   related diversification to acquire market value by leveraging core competencies.
B)   related diversification to acquire economies of scope by sharing.
C)   unrelated diversification to acquire financial synergies through portfolio management.
D)   related diversification to acquire parenting, restructuring, and financial synergies through corporate restructuring and parenting.E) A) and C)
F) A) and B)

Question 8

One of the reasons it is said that only the investment banker wins when a company is acquired is that they

Accepted Answer

A)   assure the newly acquired company will be successful.
B)   continue to work with the two companies involved.
C)   collect huge up-front fees regardless of the outcome afterwards.
D)   monitor the progress of both companies for long term growth.E) A) and B)
F) A) and C)

Question 9

The term "golden parachute" refers to

Accepted Answer

A)   a clause requiring that huge dividend payments be made upon takeover.
B)   pay given to executives fired because of a takeover.
C)   financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it.
D)   managers of a firm in a hostile takeover approaching a third party about making the acquisition.E) A) and B)
F) A) and C)

Question 10

The antitakeover tactic,________,is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it.

Accepted Answer

A)   golden parachute
B)   poison pill
C)   greenmail
D)   scorched earthE) All of the above
F) A) and B) C

Question 11

In managing the corporate portfolio,the BCG matrix would suggest that

Accepted Answer

A)   dogs should be invested in to increase market share and become cash cows.
B)   stars are in low growth markets and can provide excess cash to fund other opportunities.
C)   cash cows require substantial cash outlays to maintain market share.
D)   question marks can represent future stars if their market share is increased.E) B) and C)
F) A) and D)

Question 12

Benefits derived from horizontal and hierarchical relationships are mutually exclusive.

Accepted Answer

A) True 
 B)False

Question 13

Diversification initiatives must be justified by the creation of value for shareholders.

Accepted Answer

A) True 
 B)False  True

Question 14

Discuss the three basic means by which a firm can go about achieving synergy and create value for its shareholders.

Accepted Answer

Feedback: There are three basic means.Fi...

Question 15

Microsoft offered in 2016 to buy LinkedIn for 26.2 billion USD which was 50 percent higher than the value for LinkedIn the day before.This high premium offer was necessary for Microsoft to complete ________ initiative.

Accepted Answer

A)   a low cost
B)   an internal development
C)   a diversification
D)   a divestitureE) A) and C)
F) A) and D)

Question 16

Yahoo purchased Tumblr for 1.1 billion in 2013 but wrote off 80 percent of the investment by the middle of 2016.They considered this to be a poor

Accepted Answer

A)   expansion.
B)   divestiture.
C)   acquisition.
D)   cost savings.E) None of the above
F) A) and B)

Question 17

Capital restructuring involves changing the ________ mix.

Accepted Answer

A)   cash
B)   human resource
C)   debt-equity
D)   managementE) B) and D)
F) B) and C)

Question 18

A firm should consider vertical integration when

Accepted Answer

A)   the competitive situation is highly volatile.
B)   customer needs are evolving.
C)   the suppliers of raw materials to the firm are unable to maintain quality standards.
D)   the suppliers of the firm willingly cooperate with the firm.E) A) and B)
F) A) and C)

Question 19

Which of the following statements regarding internal development as a means of diversification is false?

Accepted Answer

A)   Many companies use internal development to extend their product or service offers.
B)   An advantage of internal development is that it is generally faster than other means of diversification.
C)   The firm can capture wealth created without having to share the wealth with alliance partners.
D)   Firms can often develop products or services at a lower cost if they rely on their own resources instead of external funding.E) B) and C)
F) A) and B)

Question 20

When using a BCG matrix,a ________ is a business that currently holds a large market share in a rapidly growing market and has minimal or negative cash flow.

Accepted Answer

A)   star
B)   dog
C)   cash cow
D)   question markE) B) and C)
F) None of the above

Exam 6: Corporate-level Strategy: Creating Value Through Diversification

Explain the purpose of antitakeover tactics and provide a specific example of an actual antitakeover tactic.

Many leading high-tech firms such as Google,Apple,and Intel have dramatically enhanced their revenues,profits,and market values through a wide variety of diversification initiatives.Which of the following is not such an initiative?

Correct Answer
verified

Divesting of businesses can accomplish many different objectives,except

Correct Answer
verified

Which of the following is not part of a good guideline list for managing strategic alliances?

Correct Answer
verified

Portfolio management matrices are applied to what level of strategy?

Correct Answer
verified

Research shows that most acquisitions of public corporations result in value creation rather than value destruction.

Correct Answer
verified

Correct Answer
verified

One of the reasons it is said that only the investment banker wins when a company is acquired is that they

Correct Answer
verified

The term "golden parachute" refers to

Correct Answer
verified

The antitakeover tactic,________,is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it.

Correct Answer
verified
C

In managing the corporate portfolio,the BCG matrix would suggest that

Correct Answer
verified

Benefits derived from horizontal and hierarchical relationships are mutually exclusive.

Correct Answer
verified

Diversification initiatives must be justified by the creation of value for shareholders.

Correct Answer
verified
True

Discuss the three basic means by which a firm can go about achieving synergy and create value for its shareholders.

Correct Answer
verified
Feedback: There are three basic means.Fi...
View Answer

Microsoft offered in 2016 to buy LinkedIn for 26.2 billion USD which was 50 percent higher than the value for LinkedIn the day before.This high premium offer was necessary for Microsoft to complete ________ initiative.

Correct Answer
verified

Yahoo purchased Tumblr for 1.1 billion in 2013 but wrote off 80 percent of the investment by the middle of 2016.They considered this to be a poor

Correct Answer
verified

Capital restructuring involves changing the ________ mix.

Correct Answer
verified

A firm should consider vertical integration when

Correct Answer
verified

Which of the following statements regarding internal development as a means of diversification is false?

Correct Answer
verified

When using a BCG matrix,a ________ is a business that currently holds a large market share in a rapidly growing market and has minimal or negative cash flow.

Correct Answer
verified

Exam 6: Corporate-level Strategy: Creating Value Through Diversification

Explain the purpose of antitakeover tactics and provide a specific example of an actual antitakeover tactic.

Many leading high-tech firms such as Google,Apple,and Intel have dramatically enhanced their revenues,profits,and market values through a wide variety of diversification initiatives.Which of the following is not such an initiative?

Correct AnswerverifiedShow Answer

Divesting of businesses can accomplish many different objectives,except

Correct AnswerverifiedShow Answer

Which of the following is not part of a good guideline list for managing strategic alliances?

Correct AnswerverifiedShow Answer

Portfolio management matrices are applied to what level of strategy?

Correct AnswerverifiedShow Answer

Research shows that most acquisitions of public corporations result in value creation rather than value destruction.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One of the reasons it is said that only the investment banker wins when a company is acquired is that they

Correct AnswerverifiedShow Answer

The term "golden parachute" refers to

Correct AnswerverifiedShow Answer

The antitakeover tactic,________,is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it.

Correct AnswerverifiedC

In managing the corporate portfolio,the BCG matrix would suggest that

Correct AnswerverifiedShow Answer

Benefits derived from horizontal and hierarchical relationships are mutually exclusive.

Correct AnswerverifiedShow Answer

Diversification initiatives must be justified by the creation of value for shareholders.

Correct AnswerverifiedTrue

Discuss the three basic means by which a firm can go about achieving synergy and create value for its shareholders.

Correct AnswerverifiedFeedback: There are three basic means.Fi...View AnswerShow Answer

Microsoft offered in 2016 to buy LinkedIn for 26.2 billion USD which was 50 percent higher than the value for LinkedIn the day before.This high premium offer was necessary for Microsoft to complete ________ initiative.

Correct AnswerverifiedShow Answer

Yahoo purchased Tumblr for 1.1 billion in 2013 but wrote off 80 percent of the investment by the middle of 2016.They considered this to be a poor

Correct AnswerverifiedShow Answer

Capital restructuring involves changing the ________ mix.

Correct AnswerverifiedShow Answer

A firm should consider vertical integration when

Correct AnswerverifiedShow Answer

Which of the following statements regarding internal development as a means of diversification is false?

Correct AnswerverifiedShow Answer

When using a BCG matrix,a ________ is a business that currently holds a large market share in a rapidly growing market and has minimal or negative cash flow.

Correct AnswerverifiedShow Answer

Correct Answer
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C

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True

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Feedback: There are three basic means.Fi...
View Answer

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