Which of the following is not a typical characteristic of a licensing arrangement?
A. Obtaining the rights to use a particular type of technology.
B. Obtaining a controlling interest in another firm
C. Obtaining patent rights
D. Paying royalties in direct proportion to revenues generated by the agreement
E. Utilizing another firm's trademark to market your product
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Which of the following are examples of business alliances?
A. Mergers
B. Acquisitions
C. Joint ventures
D. Equity partnerships
E. C and D
Selecting the appropriate financing structure for the combined firms requires consideration of which of the following:
A. The impact on the combined firm's EPS
B. Potential violation of loan covenants
C. The extent to which the primary needs of both the buyer's and seller's shareholders are satisfied.
D. A and B only
E. A, B, and C
Realizing synergy often requires spending money. Which of the following are examples of such expenditures?
A. Employee recruitment and training expenses
B. Severance expenses
C. Investment in equipment to improve employee productivity
D. Redesigning workflow
E. All of the above
Which one of the following is not one of the steps in the M&A model building process?
A. Valuing the acquirer and the target firms as standalone businesses
B. Valuing the target and acquiring firms including synergy
C. Determining the initial offer price for the target firm
D. Establishing search criteria for the potential target firm
E. Determining the combined firm's ability to finance the transaction.