Ch 7 Size of business (A Level)

Question 1

Define external growth

Answer 1

Business expansion achieved by means of mergers or takeovers with business in the same or different industries

Question 2

Define merger

Answer 2

Agreement by shareholders and managers of two business to bring both firms together under a common board of directors with shareholders in both business owning shares in the newly established business

Question 3

Define takeover

Answer 3

When a company buys more than 50% of the shares of another company and becomes the controlling owner of it
Aka aqusitionn

Question 4

Define Synergy

Answer 4

Integration is often assumed that new larger business will be more successful than the two seperate

Question 5

4 types of integration

Answer 5

1. horizontal integration
2. vertical integration - forward
3. vertical integration - backward
4. conglomerate integration