Question 1

Which tends to have the lowest commitment level?

Accepted Answer

A)  Strategic alliances 
B)  M&As 
C)  Joint ventures 
D)  Contractual agreements True or False Questions 
A)  Strategic alliances 
B)  M&As 
C)  Joint ventures 
D)  Contractual agreements True or False Questions D

Question 2

Strategic alliances are common in the pharmaceutical industry.

Accepted Answer

A) True 
 B)False  True

Question 3

Enhancing R&D is a common reason why companies form joint ventures.

Accepted Answer

A) True 
 B)False  True

Question 4

Vertical mergers in the United States are not subject to review by the Justice Department.

Accepted Answer

A) True 
 B)False

Question 5

Woolridge and Snow's research on strategic investment decisions derived results that contradict those of McConnell and Nattell.

Accepted Answer

A) True 
 B)False

Question 6

The following can be a reason why joint ventures may not succeed:

Accepted Answer

A)  Disagreement among participants 
B)  Distrust among the participants 
C)  Payment of too high a takeover premium 
D)  All the above 
E)  Both a and b 
A)  Disagreement among participants 
B)  Distrust among the participants 
C)  Payment of too high a takeover premium 
D)  All the above 
E)  Both a and b

Question 7

Chan, Kensinger, Keown, and Martin found positive abnormal returns from strategic alliances.

Accepted Answer

A) True 
 B)False

Question 8

One of the reasons why companies enter strategic alliances is to:

Accepted Answer

A)  Jointly benefit from specific knowledge resources of one of the partners 
B)  Gain from a situation where a smaller partner possesses specific knowledge and expertise 
C)  Totally avoid antitrust conflicts 
D)  Both a and b 
E)  Both a and c 
A)  Jointly benefit from specific knowledge resources of one of the partners 
B)  Gain from a situation where a smaller partner possesses specific knowledge and expertise 
C)  Totally avoid antitrust conflicts 
D)  Both a and b 
E)  Both a and c

Question 9

Research shows joint ventures have all but the following:

Accepted Answer

A)  Lower costs of completing deal than M&As 
B)  Positive shareholder announcement effects 
C)  Lower takeover premiums 
D)  Lower likelihood of antitrust concerns 
A)  Lower costs of completing deal than M&As 
B)  Positive shareholder announcement effects 
C)  Lower takeover premiums 
D)  Lower likelihood of antitrust concerns

Question 10

Chan, Kensinger, Keown, and Martin found significant transfers of wealth from alliance partners.

Accepted Answer

A) True 
 B)False

Question 11

Johnson and Houston found:

Accepted Answer

A)  Positive announcement effects for horizontal joint ventures 
B)  Positive announcement effects for vertical joint ventures 
C)  Suppliers gained more than buyer in vertical deals 
D)  All the above 
E)  None of the above 
A)  Positive announcement effects for horizontal joint ventures 
B)  Positive announcement effects for vertical joint ventures 
C)  Suppliers gained more than buyer in vertical deals 
D)  All the above 
E)  None of the above

Question 12

Strategic alliances carry a lower probability of antitrust conflicts than M&As.

Accepted Answer

A) True 
 B)False

Question 13

The following factors should govern the allocation of control rights in joint ventures except for:

Accepted Answer

A)  The degree to which there may be an underinvestment of either party that could have an adverse effect on the success of the alliance 
B)  The relative bargaining parties of the two partners 
C)  The extent to which one party may engage in opportunistic behavior, which can have an adverse effect on the outcomes 
D)  All the above 
E)  Both a and c 
A)  The degree to which there may be an underinvestment of either party that could have an adverse effect on the success of the alliance 
B)  The relative bargaining parties of the two partners 
C)  The extent to which one party may engage in opportunistic behavior, which can have an adverse effect on the outcomes 
D)  All the above 
E)  Both a and c

Question 14

Koh and Venkatraman found:

Accepted Answer

A)  The positive shareholder wealth effects from joint venture announcements were greater for deals involving companies that were more related to each other 
B)  The smaller joint venture partner benefited more than the larger one 
C)  Contractual relationships yield greater benefits than joint ventures 
D)  Both a and b 
E)  Both b and c 
A)  The positive shareholder wealth effects from joint venture announcements were greater for deals involving companies that were more related to each other 
B)  The smaller joint venture partner benefited more than the larger one 
C)  Contractual relationships yield greater benefits than joint ventures 
D)  Both a and b 
E)  Both b and c

Question 15

McConnell and Nantell study showed that shareholders in companies entering into joint ventures enjoyed announcement period returns of -4%.

Accepted Answer

A) True 
 B)False

Question 16

Johnson and Houston found that joint ventures were a favored alternative over contractual agreements when transaction costs were low.

Accepted Answer

A) True 
 B)False

Question 17

Answer: Research by Marciukaityte, Roskelley, and Wang found:

Accepted Answer

A)  Positive announcement effects to the formation of alliances in the financial services industry 
B)  Alliances in the financial services industry showed improvements in operating performance relative to the industry 
C)  Alliance partners were more likely to enter into joint ventures or M&A with each other than randomly selected firms 
D)  All the above 
A)  Positive announcement effects to the formation of alliances in the financial services industry 
B)  Alliances in the financial services industry showed improvements in operating performance relative to the industry 
C)  Alliance partners were more likely to enter into joint ventures or M&A with each other than randomly selected firms 
D)  All the above

Question 18

Answer: Das, Sen, and Sengupta showed that technological alliances were associated with greater announcement returns than marketing alliances.

Accepted Answer

A) True 
 B)False

Question 19

The following are motives for joint ventures except for:

Accepted Answer

A)  Enhance research and development capabilities 
B)  Gain access to key supplies 
C)  Enhance distribution systems 
D)  Enhance market share 
A)  Enhance research and development capabilities 
B)  Gain access to key supplies 
C)  Enhance distribution systems 
D)  Enhance market share

Which tends to have the lowest commitment level?

Strategic alliances are common in the pharmaceutical industry.

Enhancing R&D is a common reason why companies form joint ventures.

Vertical mergers in the United States are not subject to review by the Justice Department.

Woolridge and Snow's research on strategic investment decisions derived results that contradict those of McConnell and Nattell.

The following can be a reason why joint ventures may not succeed:

Chan, Kensinger, Keown, and Martin found positive abnormal returns from strategic alliances.

One of the reasons why companies enter strategic alliances is to:

Research shows joint ventures have all but the following:

Chan, Kensinger, Keown, and Martin found significant transfers of wealth from alliance partners.

Johnson and Houston found:

Strategic alliances carry a lower probability of antitrust conflicts than M&As.

The following factors should govern the allocation of control rights in joint ventures except for:

Koh and Venkatraman found:

McConnell and Nantell study showed that shareholders in companies entering into joint ventures enjoyed announcement period returns of -4%.

Johnson and Houston found that joint ventures were a favored alternative over contractual agreements when transaction costs were low.

Answer: Research by Marciukaityte, Roskelley, and Wang found:

Answer: Das, Sen, and Sengupta showed that technological alliances were associated with greater announcement returns than marketing alliances.

The following are motives for joint ventures except for:

Introduction

History of Mergers

Legal Framework

Merger Strategy

Antitakeover Measures

Takeover Tactics

Hedge Funds As Activist Investors

Going-Private Transactions and Leveraged Buyouts

The Private Equity Market

The Junk Bond and the Leveraged Loan Market and Stapled Financing

Corporate Restructuring

Restructuring in Bankruptcy

Corporate Governance

Valuation

Tax Issues in Mergers Acquisitions

Filters

Exam 14: Joint Ventures and Strategic Alliances

Which tends to have the lowest commitment level?

Strategic alliances are common in the pharmaceutical industry.

Enhancing R&D is a common reason why companies form joint ventures.

Vertical mergers in the United States are not subject to review by the Justice Department.

Woolridge and Snow's research on strategic investment decisions derived results that contradict those of McConnell and Nattell.

The following can be a reason why joint ventures may not succeed:

Chan, Kensinger, Keown, and Martin found positive abnormal returns from strategic alliances.

One of the reasons why companies enter strategic alliances is to:

Research shows joint ventures have all but the following:

Chan, Kensinger, Keown, and Martin found significant transfers of wealth from alliance partners.

Johnson and Houston found:

Strategic alliances carry a lower probability of antitrust conflicts than M&As.

The following factors should govern the allocation of control rights in joint ventures except for:

Koh and Venkatraman found:

McConnell and Nantell study showed that shareholders in companies entering into joint ventures enjoyed announcement period returns of -4%.

Johnson and Houston found that joint ventures were a favored alternative over contractual agreements when transaction costs were low.

Answer: Research by Marciukaityte, Roskelley, and Wang found:

Answer: Das, Sen, and Sengupta showed that technological alliances were associated with greater announcement returns than marketing alliances.

The following are motives for joint ventures except for:

Introduction

History of Mergers

Legal Framework

Merger Strategy

Antitakeover Measures

Takeover Tactics

Hedge Funds As Activist Investors

Going-Private Transactions and Leveraged Buyouts

The Private Equity Market

The Junk Bond and the Leveraged Loan Market and Stapled Financing

Corporate Restructuring

Restructuring in Bankruptcy

Corporate Governance

Valuation

Tax Issues in Mergers Acquisitions

Filters