Question : Case Study 15:
DEF Corporation is a conglomerate planning to acquire a technology startup to enhance its digital capabilities.
Question :
DEF Corporation aims to acquire a technology startup for digital enhancement. Which market activity is associated with this scenario?
Option 1: Primary market
Option 2: Currency swap
Option 3: Mergers and acquisitions
Option 4: Treasury bill trading
Correct Answer: Mergers and acquisitions
Solution : The correct answer is (c) Mergers and acquisitions
The market activity associated with DEF Corporation's aim to acquire a technology startup for digital enhancement is mergers and acquisitions (M&A). Mergers and acquisitions involve the consolidation of companies through various financial transactions, such as acquisitions or takeovers. In this scenario, DEF Corporation intends to acquire a technology startup, which is a strategic move to enhance its digital capabilities. M&A activities are commonly utilized for this purpose, allowing companies to grow, diversify, or improve their competitive positioning by integrating the operations and technologies of another company into their own.
To fund the acquisition of the technology startup, DEF Corporation is considering issuing bonds. What type of market activity is this?
Option 1: Secondary market
Option 2: Equity share issuance
Option 3: Money market trading
Option 4: Primary market
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile