The positive incremental net gain associated with the combination of two firms through a merger or acquisition is called (the) ___________.

A) Agency conflict.
B) Goodwill.
C) Merger cost.
D) Consolidation effect.
E) Synergy.

Synergy

The benefit that results when two or more agents work together to achieve something neither could have achieved on their own.

Incremental Net Gain

The increase in net profit resulting from a specific action, taking into account all associated costs and revenues.

Merger or Acquisition

A business strategy where two companies combine (merger) or one company purchases another (acquisition) to enhance competitive strengths or enter new markets.