Which of the following is not true of financial synergy?
A) Tends to reduce the firm's cost of capital
B) Results from a better matching of investment opportunities available to the firm with internally generated funds
C) Enables larger firms to experience lower average security underwriting costs than smaller firms
D) Tends to spread the firm's fixed expenses over increasing levels of production
E) A and B

Question

Quizplus · Accepted Answer

Financial synergy typically refers to benefits gained from cost reductions due to economies of scale in financing, improved financial capacity, or enhanced borrowing capability, rather than spreading fixed expenses over increasing levels of production, which is more related to operational synergy.

Which of the Following Is Not True of Financial Synergy