Which of the Following Is a Poor Justification for a Merger

question 14

Multiple Choice

Which of the following is a poor justification for a merger?

• A) Tax considerations
• B) Lowering cost of capital
• C) Reducing costs
• D) Increasing the size of the firm

---

Definitions:

Critical Value

The boundary value from a statistical distribution where, if the observed test statistic is beyond this point, the null hypothesis is rejected.

Null Hypothesis

A default statement suggesting that there is no statistical significance between the specified datasets, or no effect of a certain variable.

T-statistic

A type of statistic used in hypothesis testing, calculated as the difference between an observed sample mean and a hypothesized population mean, divided by the standard error of the mean.

Level of Significance

The level of significance is a threshold set by the researcher to determine the cutoff at which the null hypothesis can be rejected, commonly represented by alpha (α).