Which of the Following Is NOT a Correct Statement of a Reason

question 117

Multiple Choice

Which of the following is NOT a correct statement of a reason why computation of NPV in a merger or an acquisition may be complicated?

• A) Sometimes poison pills or greenmail provisions may exist
• B) Acquisitions are an important control device for stockholders
• C) The tax, accounting, and legal issues involved are lengthy
• D) Mergers and acquisitions are sometimes friendly
• E) The benefits of a merger or acquisition sometimes depend on strategic fits

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Definitions:

Dividend Record Date

The specific date set by a corporation's board of directors after which the shareholders on record will be entitled to receive the declared dividend.

Dividends Payable

A liability account on a company's balance sheet representing the amount owed to shareholders from declared dividends not yet paid.

Par Common Stock

Par Common Stock refers to the nominal or face value assigned to common stock shares by the issuing company.

Noncumulative Preferred Stock

A type of preferred stock where dividends not paid in one period do not accumulate or have to be paid in future periods.