Which of the Following Statements Is Most CORRECT

question 35

Multiple Choice

Which of the following statements is most CORRECT?

• A) Firms that are acquired usually have a market price below book value before the merger offer is made. However, once the initial offer is made, the price can rise above book value, but the purchase price, especially in large acquisitions, generally remains within 20% of book value.
• B) When Texaco purchased Getty Oil, many financial analysts felt that the deal made sense because it increased Texaco's market share and expanded its shrinking oil reserves. This merger exemplified the belief among the natural resource companies that buying reserves through acquisitions was less costly than exploring and finding them in the field.
• C) When Mobil Oil Company tried to acquire Conoco, which was another oil company, stockholders were concerned that the U.S. Justice Department would try to block the merger because it would lessen competition. Thus, antitrust considerations affected this proposed horizontal merger.
• D) Answers b and c are correct.
• E) All of the statements above are false.

---

Definitions:

Employees

Individuals hired by an organization to perform specific duties in exchange for compensation.

Visioning

The process of defining a future state or goal for an organization or group and creating a plan to achieve it.

Organizations

Groups or entities created to achieve specific goals, characterized by structured roles and coordination among its members.

Credited

Acknowledged or praised for one’s contributions or efforts towards a particular outcome or achievement.