İŞLETME FİNANSI II

Acquisition is taking a controlling ownership in another firm, subsidiary of another firm, or business unit of another firm by an acquirer firm. The acquired firm may continue its existence after the acquisition as a subsidiary of the acquirer. The correct answer is E.

Offshoring: The moving of various operations of a company to another country for reasons such as lower labor costs or more favorable economic conditions in that other country. The correct answer is D.

Terminal value of a firm shows the value of all future cash flows. Because the assumption is that firms survive infinite period of time (if not they are founded for a limited time), perpetuity formula is used in order to calculate the terminal value. The correct answer is D.

Liquidation value is the value that could be realized if a company were sold individually and not as part of a going concern The correct answer is C.

Net asset value is the value of assets minus value of liabilities of a firm. The correct answer is C.

In isolation style, the acquirer company keeps the acquired company at a distance. Speed of change in the acquired company’s management is rapid because of the poor financial state. Organizational configuration is dissolved rather than retained, and the need to integrate capabilities for synergy is low. The correct answer is B.

Vertical M&A is a form of business combination between two firms of which one them is a supplier, or a customer to another. The correct answer is A.

Cross-border M&A is a form of business combination between two firms in two different countries. In highly competitive global markets, M&A is seen as a strategic tool for creating value. The correct answer is A.

Conglomerate M&A is between unrelated firms in different industries. The correct answer is A.

Corporate restructuring refers to activities of firms that significantly change their business operations and/or financial structure.

Business alliance is a term that refers to different forms of combining business activities of two or more firms.

Merger is a combination of two firms in a way that only one firm survives after combining.

Network: A firm’s set of relationships, both horizontal and vertical, with other organizations – be they suppliers, customers, competitors, or other entities – including relationships across industries and countries. These networks are composed of interorganizational ties that are enduring, are of strategic significance for the firms entering them and include strategic alliances, joint ventures, long term buyer-supplier partnerships and a host of similar ties (Koleva, 2002).

Horizontal M&A is a form of business combination between two firms in the same industry.

Congeneric M&A is a form of business combination between two firms in very similar industries, which are not in any horizontal or vertical relationship.

Anergy refers to a condition of joining two separate firms producing an outcome that is less than the sum of separate entities

Hostile takeover occurs when the management of the target firm resists the merger or acquisition. The acquiring firm then needs to make a direct appeal on stockholders of the target firm.

Culture clash refers to failure of management in the post acquisition integration process.

Pricing effect is about risk and return trade- off between cash and stocks.

Resource-based view focuses on the competitive advantage concept.