Which One of the Following Statements Is Correct Concerning Acquisition

question 137

Multiple Choice

Which one of the following statements is correct concerning acquisition considerations?

• A) The value of a target firm should be calculated ignoring the market valuation.
• B) The acquisition analysis should focus on the existing cash flows of the target firm.
• C) The acquiring firm's discount rate should be used in the analysis of the merger NPV.
• D) Transaction costs and related expenses must be included in the acquisition analysis.
• E) The effects of synergy should be ignored in the acquisition analysis.

---

Definitions:

Divisional

Pertains to a structural strategy in organizations where operations are divided based on distinct products, services, markets, or geographical locations.

Different Needs

Refers to the diverse requirements or desires of individuals or groups.

Formalization

The degree to which rules and procedures are standardized in an organization.

Rules And Procedures

Guidelines and systematic steps established for consistent and orderly conduct or action.