Which statement best describes a merger concept?
A)A conglomerate merger is one where a firm combines with another firm in the same industry.
B)Regulations in Canada prohibit acquiring firms from using common shares to purchase another firm.
C)Defensive mergers are designed to make a company less vulnerable to a takeover.
D)The corporate valuation method and the equity residual method, even properly applied, produce different results.

Question

Quizplus · Accepted Answer

The concept of a defensive merger is described as a merger that is designed to make a company less vulnerable to a takeover. Options A and B are incorrect as they provide information about specific types of mergers and regulations in a specific country, respectively. Option D is also incorrect as it provides information about different valuation methods and not about the concept of a merger.

Which Statement Best Describes a Merger Concept