Which Are the Following Statements About Pre-Merger Planning Is Untrue

question 14

Multiple Choice

Which are the following statements about pre-merger planning is untrue?

• A)It is easier to predict the outcomes of horizontal M&A than other types of M&A
• B)In the case of horizontal M&A,it is easier to predict the impact on revenues than the impact on costs
• C)The outcomes of a hostile acquisition are more difficult to predict than the outcomes of a friendly acquisition
• D)Acquisitions that are directed towards a firm reinventing its business model should be regarded as more risky than those which leverage its existing business model.

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Definitions:

Conversion Ratio

The number of shares an investor receives when converting a convertible security, like a convertible bond or preferred stock, into common stock.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price.

Call Option

A call option is a financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.

Convertible Bond

A type of bond that can be converted into a predetermined number of the issuing company's shares, typically at the discretion of the bondholder.