Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

CIMAPRA19-F03-1 Exam - Topic 1 Question 94 Discussion

Company ACC. an ungeared car manufacturer has launched a takeover bid of Company BDD. a key competitor operating in the same industry Company BDD has high gearing Company ACC has a large surplus cash balance and believes that the acquisition is an opportunity to enhance shareholder wealth through the realisation of synergistic benefits. Which THREE of the following would most likely be synergistic benefits to Company ACC of purchasing Company BDD9 I
A) Reduction in staff costs due to the removal of duplicated roles. and B) Decreased cost of debt and E) Cost savings in production due to economies of scale
C) Enhanced profit due to reduced competition
D) Reduction in financial risk due to diversification

CIMAPRA19-F03-1 Exam - Topic 1 Question 94 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 94
Topic #: 1
[All CIMAPRA19-F03-1 Questions]

Company ACC. an ungeared car manufacturer has launched a takeover bid of Company BDD. a key competitor operating in the same industry Company BDD has high gearing Company ACC has a large surplus cash balance and believes that the acquisition is an opportunity to enhance shareholder wealth through the realisation of synergistic benefits. Which THREE of the following would most likely be synergistic benefits to Company ACC of purchasing Company BDD9 I

Show Suggested Answer Hide Answer
Suggested Answer: A, B, E

by Brandon at Aug 26, 2024, 11:19 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Lelia
9 months ago
Diversification could really lower financial risk for ACC!
upvoted 0 times
...
Coleen
10 months ago
Really? Economies of scale might not be that easy to achieve.
upvoted 0 times
...
Jamal
10 months ago
Definitely see enhanced profit from less competition!
upvoted 0 times
...
Clement
10 months ago
Decreased cost of debt? Not sure that's a given.
upvoted 0 times
...
Kenia
10 months ago
A reduction in staff costs makes total sense!
upvoted 0 times
...
Irving
10 months ago
I think E is definitely a possibility too. Economies of scale could really help ACC lower production costs after the acquisition.
upvoted 0 times
...
Leanora
11 months ago
C makes sense to me; if ACC buys BDD, they could reduce competition and potentially increase their market share.
upvoted 0 times
...
Dick
11 months ago
I'm not entirely sure about B. Decreased cost of debt could be a benefit, but it doesn't feel like a direct synergy from the acquisition.
upvoted 0 times
...
Catrice
11 months ago
I remember we discussed how reducing duplicated roles can lead to significant cost savings, so A seems like a strong choice.
upvoted 0 times
...
Aja
11 months ago
The key is to focus on how the acquisition could create value for Company ACC beyond just the financial aspects. Things like reduced competition and diversification risk are important to consider.
upvoted 0 times
...
Helaine
11 months ago
I'm a bit confused by the concept of synergistic benefits. Can someone explain that to me in simpler terms? I want to make sure I understand it before selecting my answers.
upvoted 0 times
...
Nguyet
11 months ago
Hmm, I'm a bit unsure about this one. I'll need to carefully consider each option and how they relate to the given information about the companies.
upvoted 0 times
...
Lawrence
11 months ago
This question seems straightforward, I think I can identify the three most likely synergistic benefits for Company ACC.
upvoted 0 times
...
Verona
11 months ago
Okay, let's see. Reduction in staff costs, decreased cost of debt, and cost savings in production - those seem like the most logical choices here.
upvoted 0 times
...
Catherin
11 months ago
Hmm, I'm a bit unsure about this one. I know there are a few different high availability options for vCenter, but I'll have to think through the specifics of each one to determine the best fit for this scenario.
upvoted 0 times
...
Lindsey
11 months ago
I'm not totally confident, but I think I'll go with option D, Disaster Recovery. That seems to fit the description of a standard physical safeguard.
upvoted 0 times
...
Janae
2 years ago
I believe option D is important too, as it can help in reducing financial risk through diversification.
upvoted 0 times
...
Bulah
2 years ago
I agree with Erick, option E also makes sense as it can lead to cost savings.
upvoted 0 times
...
Cammy
2 years ago
Economies of scale, baby! Now that's what I call a real synergy. Can't wait to see the production costs go down. Maybe they'll even hire a few court jesters to entertain the workers, you know, for morale.
upvoted 0 times
...
Frederic
2 years ago
Wait, so they're going to save money on debt by acquiring a highly geared company? That's like trying to get out of debt by taking on more debt. Hmm, I'm not convinced.
upvoted 0 times
Arleen
2 years ago
B) Decreased cost of debt
upvoted 0 times
...
Cassie
2 years ago
A) Reduction in staff costs due to the removal of duplicated roles.
upvoted 0 times
...
...
Rashad
2 years ago
Diversification is always a good thing, right? Reducing financial risk sounds like a solid synergistic benefit to me.
upvoted 0 times
...
Natalie
2 years ago
Enhanced profit due to reduced competition is a bit concerning. I hope they don't plan on creating a monopoly or engaging in anti-competitive practices.
upvoted 0 times
Janae
2 years ago
D) Reduction in financial risk due to diversification.
upvoted 0 times
...
Mirta
2 years ago
A) Reduction in staff costs due to the removal of duplicated roles.
upvoted 0 times
...
Lisha
2 years ago
I agree, we need to make sure they don't abuse their power.
upvoted 0 times
...
...
Thora
2 years ago
Reduction in staff costs and cost savings in production seem like obvious synergies. But I'm not sure about decreased cost of debt - how does that work exactly?
upvoted 0 times
Bernadine
2 years ago
Decreased cost of debt can be achieved through lower interest rates and improved credit ratings.
upvoted 0 times
...
Wilford
2 years ago
B) Decreased cost of debt
upvoted 0 times
...
Delisa
2 years ago
E) Cost savings in production due to economies of scale
upvoted 0 times
...
Royal
2 years ago
A) Reduction in staff costs due to the removal of duplicated roles.
upvoted 0 times
...
...
Erick
2 years ago
I think option A is a synergistic benefit because it can help reduce costs.
upvoted 0 times
...

Save Cancel