The Value of Combined Businesses Following a Takeover Should Reflect

question 26

Multiple Choice

The value of combined businesses following a takeover should reflect:

• A) The sum of their standalone values
• B) The sum of their standalone values less anticipated synergy
• C) The standalone value of the target plus net synergy less the standalone value of the acquirer
• D) The sum of the standalone values of the target and acquirer plus net synergy
• E) None of the above

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Definitions:

Independent Variables

Factors in a study or simulation that are intentionally altered to see how they impact the variables that depend on them.

Multicollinearity

A condition in multiple regression where one predictor variable in a model can be linearly predicted from the others with a substantial degree of accuracy.

Regression Coefficient

A coefficient in a regression equation that represents the degree of change in the dependent variable for a one-unit change in an independent variable.

Durbin-Watson Statistic

A test statistic used to detect the presence of autocorrelation in the residuals from a regression analysis.