Which One of the Following Statements Is Correct Concerning Acquisitions

question 72

Multiple Choice

Which one of the following statements is correct concerning acquisitions?

• A) If the acquisition is done on an all cash basis the shareholders of the target firm are excluded from any losses resulting from an unsuccessful merger.
• B) Acquisitions done on an all cash basis are generally considered non-taxable events.
• C) Acquisitions done utilizing shares of voting common stock have no effects on the control of the post-merger firm.
• D) If the acquisition is done on an all cash basis the shareholders of both the acquirer and the acquired firm will gain from any realized future benefits of the merger.
• E) The capital structure of the post-merger firm will be the same whether an acquisition is done on a cash basis or on a stock basis.

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Definitions:

Risk

The possibility of loss, injury, or other adverse or unwelcome circumstance; a chance or situation involving such a possibility.

Sale of Goods Act

Legislation regulating the sale and purchase of goods, ensuring fairness in transactions and the rights of buyers and sellers.

Fair and Even

An equitable approach that aims for fairness and balance in decision-making or distribution.

Common Law Recourse

Legal remedies or actions available to individuals under the judicial system based on customs and judicial precedent, rather than on statutes.