The Incremental Gain from a Merger Is Defined as The

question 310

Multiple Choice

The incremental gain from a merger is defined as the:

• A) Stand-alone value of the target firm minus the synergistic effects.
• B) Value of the combined firm minus the sum of the stand-alone values of each firm.
• C) Stand-alone value of the acquired firm minus the acquisition costs.
• D) The sum of the stand-alone values of both firms minus the acquisition costs.
• E) The value of the purchasing firm plus the synergistic effects minus the acquisition costs.

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Definitions:

Economic Growth

An increase in the production of goods and services in an economy over a period, typically reflected as a percentage increase in real GDP.

Doubling Inputs

When the quantities of all inputs used in the production process are increased by the same proportion.

Foreign Direct Investment

is an investment made by a firm or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

Foreign Portfolio Investment

Investment in financial assets from another country, such as stocks or bonds, without direct control over the businesses.