3 Short Answer Questions, around 125-175 words each. Thank you
1) Diversification is good for shareholders. So why shouldn’t managers acquire firms in different industries to diversify a company?
2) Your spouse works for Southwest Airlines and you work for a grocery store. Is your company or your spouse’s company more likely exposed to systematic risk? Explain.
3) If you are planning an acquisition that is motivated by trying to acquire expertise, you are basically seeking to gain intellectual capital. What concerns would you have in structuring the deal and the post-merger integration that would be different from the concerns you would have when buying physical capital?