Question : Case Study 20:
PQR Inc. is a conglomerate planning to acquire a pharmaceutical company to diversify its business.
Question :
PQR Inc. aims to acquire a pharmaceutical company for business diversification. 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
Mergers and acquisitions involve the consolidation of companies or the purchase of one company by another, leading to the integration of operations and assets. In this case, PQR Inc. is planning to acquire a pharmaceutical company to diversify its business operations, which is a classic example of a merger or acquisition to expand and diversify their business portfolio.
To fund the acquisition of the pharmaceutical company, PQR Inc. is considering issuing bonds. What type of market activity is this?
Option 2: Secondary market
Option 3: Money market trading
Option 4: Equity share issuance
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile