Question 1

_________ merger involves firm engaged in unrelated types of activities.
A)Vertical
B)Horizontal
C)Conglomerate
D)Demerger

Accepted Answer

A conglomerate merger involves firms engaged in unrelated types of activities, diversifying their business operations and markets.

Question 2

When existing company is dissolved to form few new companies, it is called as ________
A)Sin off
B)Split off
C)Split up
D)All of the above

Accepted Answer

When an existing company is dissolved to form a few new companies, it is referred to as a "Split up." This process involves breaking up a company into several parts, each of which may become a separate entity.

Question 3

__________means an acquirer takes over the control of the target company.
A)Joint Venture
B)Takeover
C)Disinvestment
D)Demerger

Accepted Answer

A takeover involves an acquirer taking control of the target company, typically through the purchase of a majority stake.

Question 4

The ___________means changing the structure of an organization such as reducing the hierarchical levels.
A)Financial Restructuring
B)Organizational Restructuring
C)Corporate Restructuring
D)All of the above

Accepted Answer

Organizational restructuring specifically refers to modifications within an organization's structure, such as reducing hierarchical levels, to improve efficiency or adapt to new strategies.

Question 5

________parties work together or a single project for a finite period of time.
A)Strategic Alliance
B)Joint Venture
C)Disinvestment
D)Franchising

Accepted Answer

Strategic alliances are partnerships between two or more parties that work together on a specific project for a limited period of time.

Question 6

__________means the action of an organization or government selling or liquidating an asset or subsidiary.
A)Merger
B)Joint Venture
C)Takeover
D)Disinvestment

Accepted Answer

Disinvestment refers to the process where an organization or government decides to sell or liquidate an asset or subsidiary. This is often done to raise funds or cut losses.

Question 7

__________ is an arrangement whereby the assets of two or more companies come under the control of one company.
A)Merger
B)Buyout
C)Joint Venture
D)Demerger

Accepted Answer

A merger is an arrangement where the assets of two or more companies come under the control of one company, typically resulting in a single entity.

Question 8

________may be defined as an arrangement where one party grants another party the right to use trade name.
A)Alliance
B)Franchising
C)Slump sale
D)Joint Venture

Accepted Answer

Franchising is the arrangement where one party (the franchisor) grants another party (the franchisee) the right to use its trademark or trade name as well as certain business systems and processes, to produce and market a good or service according to certain specifications.

Question 9

________merger is a merger of two or more companies that compete in the same industry.
A)Vertical
B)Horizontal
C)Co generic
D)Conglomerate

Accepted Answer

Horizontal mergers occur between companies that compete in the same industry, aiming to consolidate market position, achieve economies of scale, or expand their product lines.

Question 10

____________ helps a firm to grow and expand.
A)Corporate Restructuring
B)Merger
C)Takeover
D)Demerger

Accepted Answer

Corporate restructuring helps a firm to grow and expand by reorganizing its operations, assets, and liabilities to improve efficiency and profitability.

Question 11

In _________, company distributes its shareholding in subsidiary to its shareholders thereby not changing the ownership pattern.
A)Spin off
B)Split off
C)Split up
D)All of the above

Accepted Answer

In a spin-off, a company creates a new independent company by distributing shares of the new company to its existing shareholders, thus not altering the ownership pattern among the shareholders.

Question 12

________ is the fusion of two or more existing companies.
A)Merger
B)Takeover
C)Bailout
D)Demerger

Accepted Answer

A merger involves the combination of two or more companies into a single entity, typically to achieve synergistic benefits, expand market reach, or enhance competitiveness.

Question 13

Reverse Merger takes place when a healthy company merges with a financially ________company.
A)Weak
B)Strong
C)Merged
D)All of the above

Accepted Answer

A reverse merger typically involves a healthy company merging with a financially weak company, often to take advantage of the latter's stock market listing.

Question 14

The company which is formed as a result of the merger is known as _______ company.
A)Amalgamating
B)Amalgamated
C)Bailout
D)Takeover

Accepted Answer

An amalgamated company is the result of combining two or more companies into one new entity. This term specifically refers to the new entity formed from such a merger.

Question 15

The risks of investors can be __________through adequate transparency an disclosures.
A)Enhance
B)Increased
C)Minimized
D)Maximized

Accepted Answer

The risks of investors can be minimized through adequate transparency and disclosures, as these practices provide investors with the necessary information to make informed decisions, thereby reducing uncertainty and risk.

Question 16

___________ deals with Accounting for amalgamations.
A)Accounting Standard 14
B)Accounting Standard 11
C)Accounting Standard 13
D)Accounting Standard 12

Accepted Answer

Accounting Standard 14 (AS 14) deals with accounting for amalgamations and the treatment of any resultant goodwill or reserves.

Question 17

_________ plays an important role in survival of weak units.
A)Merger
B)Demerger
C)Disinvestment
D)Franchising

Accepted Answer

Merger plays a significant role in the survival of weak units by allowing them to combine with stronger entities, thereby gaining access to additional resources, expertise, and markets that can help them stabilize and grow.

Question 18

__________ is the most important piece of restructuring and organizational change.
A)Structure for Success
B)Communication
C)Plan Ahead
D)Meet in the middle

Accepted Answer

Communication is crucial in restructuring and organizational change as it ensures all stakeholders are informed, aligned, and engaged throughout the process.

Question 19

___________is levied on "Instruments".
A)Stamp duty
B)Custom duty
C)Excise duty
D)All of the above

Accepted Answer

Stamp duty is a tax that is levied on legal documents, referred to as "instruments," in the context of their legality, such as contracts, receipts, licenses, and others.

Question 20

The Competition Act, 2002 regulates the various forms of business combinations through __________
A)Reserve Bank of India
B)SEBI Regulation
C)Competition Commission of India
D)All of the above

Accepted Answer

The Competition Act, 2002 is regulated by the Competition Commission of India (CCI), which ensures that no business practices or combinations adversely affect competition in India.

Quiz 1: Business Combinations and Restructuring Techniques

_________ merger involves firm engaged in unrelated types of activities.

When existing company is dissolved to form few new companies, it is called as ________

__________means an acquirer takes over the control of the target company.

The ___________means changing the structure of an organization such as reducing the hierarchical levels.

________parties work together or a single project for a finite period of time.

__________means the action of an organization or government selling or liquidating an asset or subsidiary.

__________ is an arrangement whereby the assets of two or more companies come under the control of one company.

________may be defined as an arrangement where one party grants another party the right to use trade name.

________merger is a merger of two or more companies that compete in the same industry.

____________ helps a firm to grow and expand.

In _________, company distributes its shareholding in subsidiary to its shareholders thereby not changing the ownership pattern.

________ is the fusion of two or more existing companies.

Reverse Merger takes place when a healthy company merges with a financially ________company.

The company which is formed as a result of the merger is known as _______ company.

The risks of investors can be __________through adequate transparency an disclosures.

___________ deals with Accounting for amalgamations.

_________ plays an important role in survival of weak units.

__________ is the most important piece of restructuring and organizational change.

___________is levied on "Instruments".

The Competition Act, 2002 regulates the various forms of business combinations through __________