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Question 1
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Restructuring strategies are commonly used to correct or deal with the results of ineffective mergers and acquisitions.

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Question 2
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The relatively strong U.S. dollar has increased the interest of firms from other nations to acquire U.S. companies.

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Question 3
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Evidence suggests that acquisitions usually lead to favorable financial outcomes, especially for the acquiring firm.

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Question 4
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Typical returns on acquisitions for acquiring firms are close to zero.

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Question 5
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A merger is defined as a strategy in which one firm purchases controlling interest in another firm.

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Question 6
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A merger is a strategy through which two firms agree to integrate their operations on a relatively coequal basis.

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Question 7
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In the final analysis, firms use merger and acquisition strategies to improve their ability to create value for all stakeholders, including stockholders.

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Question 8
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An acquisition occurs when one firm buys a controlling or 100 percent interest in another firm and the acquired firm becomes a subsidiary business.

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Question 9
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Most acquisitions that are designed to achieve greater market power entail buying a competitor, a supplier, a distributor, or a business in a highly related industry.

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Question 10
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Moon-in-June, a designer and manufacturer of wedding dresses, has decided to purchase a retail chain specializing in bridal wear. This purchase will be useful in gaining more market power for Moon-in-June.

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Question 11
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Research suggests that horizontal acquisitions of firms with dissimilar characteristics result in higher performance levels.

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Question 12
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Research suggests that horizontal acquisitions result in higher performance when the firms have similar strategies, assets, and capabilities.

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Question 13
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A horizontal acquisition involves two firms in the same industry.

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Question 14
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A related acquisition involves two firms in the same industry.

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Question 15
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An advantage of using horizontal, vertical, or related acquisitions is that they are not subject to regulatory review.

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Question 16
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Firms are more likely to enter a market through acquisition when high product loyalty is present in the industry.

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Question 17
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The lower the barriers to entry, the more likely firms will use acquisition as a means to enter a market.

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Question 18
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In the current global landscape, firms from North America and Europe use the acquisition strategy more frequently than firms from other nations.

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Question 19
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The current Chinese cross-border strategy is to focus on buying global brands, sales networks, and goodwill in branded products.

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Question 20
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Research suggests that emerging economy firms pay a higher premium than other firms when making cross-border acquisitions.

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