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Home > Business Administration > Question

What is Synergy:

0
A) A decrease in company value after merger
B) The combined effect being greater than the sum of individual effects
C) Separation of business activities
D) Reduction in production cost only

Correct Answer: B) The combined effect being greater than the sum of individual effects

• In massive corporate mergers, synergy heavily means The combined effect being greater than the sum of individual effects. • Mathematically and conceptually in corporate business logic, synergy is famously expressed as 2 + 2 = 5. • Merging completely eliminates costly redundant corporate departments, strongly generating Cost synergy. • Cross-selling distinct products strictly to a newly merged massive customer base generates Revenue synergy. • The complete legal separation of a massive corporate division into a new independent company is called a Spin-off.

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