ts log Ourse M D n ystematically underestimate the innerent level of risk present in the securinized dear obligations, ovennvest in them, and trius cause a nancial crisis Question 10 1 pts A "Diversification discount" is: O The stock price penalty which reflects that some diversified companies can be worth less than the sum of the values of their business units O Essentially the same concept as the "Acquisition premium" O The amount of bonuses the target company's managers demand before they agree to sell their company to the acquirer O The amount by which the fair market value of the target company is higher than the price the acquiring company pays for it Question 11 2 pts There are several reasons for the value destruction for the acquirers. All factors listed below can be such reasons EXCEPT: O Escalating commitment and/or overcommitment to buying the target by the acquiring managers O Downplaying the costs associated with achieving the potential synergies in the acquisition O Acquiring a poorly performed company with a track record of declining revenues and profits O Self-interested top managers of the acquirer pursuing empire-building at the expense of the shareholders 4 pts Question 12 Please briefly explain the logic of the transaction cost economics: What is a market failure and why it can sometimes happen? Why is vertical integration considered the "ultimate" tool to overcome market failure? What problems can vertical integration bring to the firm that implements it? Aan of