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Coca Cola to purchase bottler in 12.3 billion Deal

Theaquisition of Coca Cola Enterprises is an example of a

a.Capital Structure

B.Capital Budgeting

C.Poor

D.Good

Cola Cola Company agreed to aqusition terms with North AmericanBottler Coca Cola Enterprises. Coca Cola Co sells beveragesconcentrate and syrup to the licensed bottlers who use it to createthe finished product. The aquisition is expected to save thecompany millions in through elimination of duplicated efforts andincreased opportunities for revenues. PepsiCo made a similar movein August 2009 when the company brought its two largest bottlersback in house. Shareholders of Coca Cola Enterprises respondedpositively to Cocoa Cola’s aquisition by driving the price up 27percent. The agreement goives the bottlers shaeholders $10 a shareand one share in the new bottling company. Coca Cola Company shareswere up only a few cents on the news.

Thinking Critically questions

1. An aqusitions or merger that involves two components of aproduct chain is called

A. conglomerate merger

B. horizontal merger

C. neutral aquisition

D. vertical merger

2. The theory that maintains thet the current price of anasset reflects all available information about that asset is knownas the

A. efficient markets hypothesis

B. asset valuation theory

C. static price theory

D. none of the above

3. The aquisition of Coca-Cola Enterprises is an example of a_____________ decision.

A. capital structure

B. capital budgeting

C. poor

D. good