Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Question
Chapter 20, Problem 4DQ
Summary Introduction
To explain:Â The difference between vertical and horizontal integrations and the effect of the anti-trust policy on mergers.
Introduction:
Vertical integration:
A vertical integration is one in which the acquirement of firms with the same production process within the same industry is done.
Horizontal integration:
A horizontal integration is one in which the acquirement of firms with the same level of value chain in an industry is done.
Anti-trust policy:
Anti-trust laws are statues of the U.S. to ensure the prevention of consumer exploitation by implementing healthy competition in an open-market economy.
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Check out a sample textbook solutionStudents have asked these similar questions
The following are sensible motives for mergers EXCEPT:
a.
Economies of scope
b.
Reducing firm risk through diversification
c.
Reducing competition
d.
Eliminating inefficiencies
e.
All of the above
Find a recent merger transaction that failed due to regulatory concerns over market share concentration and reduction of consumer alternatives. Do you support the regulatory concerns? Explain briefly the transaction and your reasoning.
12.
Which of the following point is not consistent with the decision of undertaking a merger and acquisition?
Select one:
a.
Reducing operational synergies
b.
Capturing tax benefits
c.
Taking advantage of economies of scale
d.
Improving target management
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