What Is the Average Market Reaction to a Takeover Announcement

question 40

Multiple Choice

What is the average market reaction to a takeover announcement?

• A)The price of the target increases by 15%,while the price of the acquirer decreases by 1%.
• B)The price of the target increases by 15%,while the price of the acquirer increases by 1%.
• C)The price of the target and acquirer both increase by 15%.
• D)The price of the target increases by 1%,while the price of the acquirer increases by 15%.

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Definitions:

First-in

Typically refers to the "First-In, First-Out" (FIFO) inventory method where the oldest inventory items are recorded as sold first.

Conversion Costs

The costs required to convert raw materials into finished goods, including direct labor and manufacturing overhead.

Equivalent Unit

A concept used in cost accounting to convert the amount of work done on partially finished goods into the equivalent of complete goods.

First-in

Typically refers to the "First-in, First-out" (FIFO) inventory method, where goods that are first produced or acquired are the first ones to be sold.