Firm a Is Planning to Acquire Firm B

question 53

Multiple Choice

Firm A is planning to acquire Firm B. If Firm A prefers to make a cash offer for the merger, it indicates that

• A)firm A's managers are optimistic about the postmerger value of A.
• B)firm A's managers are pessimistic about the postmerger value of A.
• C)firm A's managers are neutral about the postmerger value of A.
• D)firm A's managers are neutral about the postmerger value of B.

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Definitions:

Lawn-mowing

The process of cutting the grass in a garden or yard to maintain a neat and orderly appearance.

Perfectly Competitive

A market structure characterized by many buyers and sellers, where no single entity has a significant impact on prices.

Short Run

A period in which at least one factor of production is fixed, limiting the ability to adjust production rapidly.

Profits

The financial gain obtained when the revenue from business activities exceeds the expenses, taxes, and costs associated with maintaining the business.