GWD 29-12

33 to 35 GWD-29-Q11-Q13
                

      Findings from several studies on

       corporate mergers and acquisitions

       during the 1970’s and 1980’s raise

Line       questions about why firms initiate and

  (5)      consummate such transactions.  One

study showed, for example, that acquir-

ing firms were on average unable to

maintain acquired firms’ pre-merger

levels of profitability.  A second study

 (10)      concluded that post-acquisition gains

to most acquiring firms were not ade-

quate to cover the premiums paid

to obtain acquired firms.  A third

demonstrated that, following the

 (15)      announcement of a prospective

merger, the stock of the prospective

acquiring firm tends to increase in

value much less than does that of

the firm for which it bids.  Yet merg-

 (20)      ers and acquisitions remain common,

       and bidders continue to assert that

       their objectives are economic ones.

Acquisitions may well have the desir-

able effect of channeling a nation’s

 (25)      resources efficiently from less to

more efficient sectors of its economy,

but the individual acquisitions execu-

tives arranging these deals must see

them as advancing either their own or

 (30)      their companies’ private economic

interests.  It seems that factors hav-

ing little to do with corporate economic

       interests explain acquisitions.  These

factors may include the incentive

 (35)
               compensation of executives, lack

of monitoring by boards of directors,

and managerial error in estimating the

value of firms targeted for acquisition.

      Alternatively, the acquisition acts of

 (40)     bidders may derive from modeling:

a manager does what other man-

agers do.

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Q12:

It can inferred from the passage that the author would be most likely to agree with which of the following statements about corporate acquisitions?

1. Their known benefits to national economies explain their appeal to individual firms during the 1970’s and 1980’s.

2. Despite their adverse impact on some firms, they are the best way to channel resources from less to more productive sectors of a nation’s economy.

3. They are as likely to occur because of poor monitoring by boards of directors as to be caused by incentive compensation for managers.

4. They will be less prevalent in the future, since their actual effects will gain wider recognition.

5. Factors other than economic benefit to the acquiring firm help to explain the frequency with which they occur.

我认为C和E都很有问题，不知道答案选E的依据在哪里？整个阅读只说accqusition的出现，没有提到什么频率的问题。

C说那两个因素什么发生的可能性相近，文中没有提及。故C错误

E正确，原文提到了频率，19行“Yet merg-

 (20)      ers and acquisitions remain common"