CFA Practice Question

There are 86 practice questions for this study session.

CFA Practice Question

Which of the following is least likely to be a motivation if company A wants to acquire company B?

A. A's management believes that organic growth will grow revenue faster than external growth.
B. B has a strong research department which A wants to acquire.
C. B has accumulated a large amount of tax losses which could be used to offset A's gains.
D. The management at A believes it can change B's poor organization structure to make it competitive.
Correct Answer: A

B, C and D are all potential motivations for mergers. It's typically faster for companies to grow externally and companies turn to M&A to achieve that growth.

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