The Offer Price for a Target Firm Is Considered Appropriate

question 37

True/False

The offer price for a target firm is considered appropriate if the NPV of the difference between the present value of target plus anticipated synergy and the offer price including any transaction-related expenses is less than zero.

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Definitions:

UCS

An acronym for Unconditioned Stimulus, which in classical conditioning theory is an event that naturally and automatically triggers a specific response without previous conditioning.

Classical Conditioning

A process of learning that takes place when there is a connection between an environmental trigger and a stimulus that occurs naturally.

Previously Neutral

Refers to a stimulus that initially elicits no innate response until it is paired with an unconditioned stimulus in the learning process of classical conditioning.

Conditioned Response

A learned response to a previously neutral stimulus that has become associated with an unconditioned stimulus through conditioning.