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:

Consumer Surplus

The variance between the aggregate amount consumers intend and have the means to pay for a good or service and the sum they actually pay.

Consumer Surplus

The gap between what consumers are prepared and able to spend on a product or service and the actual amount they end up paying.

Perfect Price Discriminator

A theoretical entity that charges each consumer the maximum price they would be willing to pay for a good or service.

Perfectly Competitive Firm

A company that operates in a market where buyers and sellers are so numerous and well informed that all elements of monopoly are absent, and the market price of goods is beyond the control of individual buyers and sellers.