Asked by Scott Jordan on May 28, 2024
Verified
A proposed acquisition may create synergy by reducing the utilization of the acquiring firm's assets.
Synergy
The positive incremental net gain associated with the combination of two firms through a merger or acquisition.
Utilization
In finance, utilization can refer to the degree to which a company’s resources or assets are being used efficiently to generate revenues or profits.
Acquiring Firm's Assets
Refers to the assets that a company takes control of as a result of purchasing or merging with another business, contributing to its overall asset base.
- Gain insight into the monetary gains and combined efficiencies achieved through mergers and acquisitions.
Verified Answer
JH
Jonathan HawksMay 29, 2024
Final Answer :
False
Explanation :
Synergy from an acquisition typically aims to increase efficiency and asset utilization, not reduce it. It often involves leveraging combined strengths, resources, and capabilities to achieve greater performance or cost savings.
Learning Objectives
- Gain insight into the monetary gains and combined efficiencies achieved through mergers and acquisitions.