Which of the Following Statements Is False

question 209

Multiple Choice

Which of the following statements is false?

• A) Market values should be used to determine the value of a firm.
• B) In calculating the value of a merger or acquisition only incremental cash flows should be considered.
• C) The cost of capital for the target firm is generally considered to be the relevant discount rate associated with a merger or acquisition.
• D) Transaction costs should be included when calculating the value of a merger.
• E) There will typically be a gain in an acquisition if the target firm's management is better than the management of the acquiring firm.

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Definitions:

Self-serving

Acting in a way that benefits oneself, often at the expense of others or ethical principles.

Conduct

The manner in which an individual behaves or performs in a professional or personal setting.

Ethical Reasoning

involves using moral principles and values to evaluate and make decisions about what is right or wrong in various situations.

Happiness

A state of well-being characterized by emotions ranging from contentment to intense joy.