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.

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Definitions:

Contact Hypothesis

A theory suggesting that interpersonal contact is one of the most effective ways to reduce prejudice between majority and minority group members.

Pettigrew

Thomas F. Pettigrew is a social psychologist known for his research on racism, intergroup contact theory, and social identity.

Recreational

Activities or experiences engaged in for pleasure, relaxation, or leisure.

Work

An activity involving mental or physical effort done in order to achieve a purpose or result, often as part of a job or profession.