Factors that directly affect the merger and acquisition environment include all the following except
A) general economic conditions.
B) level of optimism about the future.
C) currency fluctuations.
D) managerial style.

Question

Quizplus · Accepted Answer

The general economic conditions and level of optimism about the future influence manager willingness to take on the risk of acquisitions. Additionally, the availability of financing can influence acquisition activity. During boom periods, financing is typically widely available. In contrast, during recessionary periods, potential acquirers typically find it difficult to borrow money to finance acquisitions. Governmental policies such as regulatory actions and tax policies can also make the environment of mergers and acquisitions more or less favorable. For example, increased antitrust enforcement will decrease the ability of firms to acquire their competitors or possibly firms in closely related markets. In contrast, increased regulatory pressures for good corporate governance may leave boards of directors more open to acquisition offers. Finally, currency fluctuations can influence the rate of cross-border acquisitions, with firms in countries with stronger currencies being in a stronger position to acquire.

Factors That Directly Affect the Merger and Acquisition Environment Include