Which of the Following Statements Is True in a Deal

question 39

Multiple Choice

Which of the following statements is true in a deal involving the exchange of acquirer shares for target shares?

• A) The acquirer should consider the impact of the deal on fully diluted earnings
• B) The acquirer should consider the likely conversion of "in the money" options held by target employees
• C) Target convertible debt can impact the number of acquirer shares that must be issued to purchase all of the target shares outstanding
• D) Target convertible preferred stock can impact the number of acquirer shares that must be issued to purchase all of the target shares outstanding
• E) All of the above

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Definitions:

Legal Contract

A contract that is recognized and can be enforced by law, entered into by two or more parties.

Both Parties

Refers to the two or more entities involved in a legal agreement or negotiation.

Gross Sales

The total sales revenue of a company before any deductions are made for returns, allowances, or discounts.

Royalty Fees

Royalty fees are payments made by one party (the licensee) to another (the licensor) for the right to use the licensor's property, typically intellectual property, under agreed terms.