Strategic Financial Management Set 5
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This set of Strategic Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Strategic Financial Management Set 5
Q1 | …… is the process under which an existing large company purchases the business of another smallcompany doing similar business.
- Merger
- Acquisition
- Absorption
- Take over
Q2 | Combination of two or more organisations in the same industry is called…..
- Horizontal merge
- Vertical merger
- Concentric
- Conglomerate
Q3 | ………is the combination of two or more organisation in a related industry but do not offer sameproduct.
- Horizontal
- Vertical
- Concentric
- Conglomerate
Q4 | The acquisition of a firm in the same industry, but at a different stage of the production process iscalled
- Conglomerate
- Forward
- Vertical
- Horizontal
Q5 | The positive incremental net gain associated with two firms enter into a merger is called ……
- Goodwill
- Merger cost
- Consolidation effect
- Synergy
Q6 | If Microsoft were to acquire US Airways, the acquisition would be classified as a ,……..
- Conglomerate
- Vertical
- Horizontal
- Concentric
Q7 | The distribution of shares in a subsidiary to existing parent company’s stockholder is called ……
- Bear hug
- Spin off
- Buy out
- Split off
Q8 | ……. is the ratio in which an acquiring company will offer its own shares in exchange for the targetcompany’s share during merger .
- Swap ratio
- Price- earnings ratio
- Exchange ratio
- Enterprise value to sales ratio
Q9 | …….. isa type of takeover in which the acquiring company turns itself into a subsidiary of thepurchased company.
- Bailout takeover
- Reverse takeover
- Backflip
- Conglomerate
Q10 | PAC stands for…..
- Persons acting on concert
- Promoters acting in concert
- Public announcement for consolidation
- Public acting concert
Q11 | This strategy enables the existing shareholders of the target company to buy additional shares at ahigh discount rate.
- Flip- in
- Flip over
- Spin out
- Spin off.
Q12 | This plan gives veto rights over the controlof changes to managers.
- Golden parachute
- Poison pills
- Dual class stock
- Super majority announcements
Q13 | White knight relates to ……
- Green mail
- Crown Jewel
- Litigation
- People pill
Q14 | Whichof the following is a pre offer take-over defences?
- Crown Jewel
- People pill
- Poison pill
- PAC man defence
Q15 | Which of the following is a post offer take- over defence?
- Poison pills
- Golden parachute
- White knight
- Dual class stock
Q16 | The process by which company or organisation is divided and thereby becomes an independentbusiness is called …..
- Spin out
- Spin off
- Split off
- Sell off
Q17 | The process of converting a subsidiary into an independent entity is called….
- Spin out
- Split off
- Sell off
- Spin off
Q18 | LBO stands for….
- Leveraged borrow outs
- Leveraged buy outs
- Leveraged buy offs
- Longterm buy outs
Q19 | …..isan acquisition in which management team of the company purchases assets and operation theymanage.
- LBO
- MBO
- Demerger
- Stubs
Q20 | NOPAT stands for….
- Net organisation profit after tax
- Net operating profit after tax
- Net operation profit after a term
- None of the above
Q21 | IGR stands for….
- Interest growth rate
- Internal gearing rate
- Internal growth rate
- None of the above
Q22 | SGR stands for
- Sustainable growth rate
- Statutory growth rate
- Stable growth rate
- Suitable growth rate
Q23 | Financial leverage indicates disproportionate change in taxable income as a result of change in……
- Operating income
- Operating leverage
- Interest
- Tax
Q24 | The term trading on equity is generally used for …. .…financial leverage
- Unfavourable
- Moderate
- Less than 1
- Favourable
Q25 | MOS stands for ….
- Marginal own source
- Money of seller
- Margin of safety
- Medium own source