Tom Copeland, Tim Keller, and Jack Morrin, on their book Valuation, Measuring and Managing the Value of Companies, observed that acquirers paid too much for companies because of all but one of the following reasons:
a. market potential greater than estimated.
b. overoptimistic appraisal of market potential.
c. overestimation of synergies.
d. poor due diligence.
e. overbidding.
A
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Negotiators should avoid using mismatched strategies and tactics. What will likely happen when a negotiator uses overly distributive tactics in a fundamentally integrative situation?
What will be an ideal response?
Downy Airlines discloses the funded status of pension plans and the health and life insurance plans for two recent years. Both the pension plan and other benefit plans are underfunded. The underfunded amounts for these plans appear in
a. current assets and noncurrent assets on the balance sheet. b. current liabilities and noncurrent liabilities on the balance sheet. c. shareholders' equity on the balance sheet. d. revenue on the income statement. e. expenses on the income statement.
In the American Marketing Association's Statement of Ethics, which ethical value stresses a firm's attempts to balance the needs of its buyers with the interests of sellers?
A. honesty B. responsibility C. fairness D. openness E. citizenship
In capital budgeting analysis, the riskiness of a project is evaluated to:
A. determine the modified internal rates of return from the project. B. determine the appropriate rate of return to use for computing the present value of the estimated cash flows. C. determine the duration of the project. D. determine the role of management to ensure project completion within stipulated time. E. determine the opportunity rate of return.