The Overriding Goal for Merging Is to

question 75

Multiple Choice

The overriding goal for merging is to

• A) increase cash flows.
• B) maximize operating efficiency.
• C) maximize shareholder wealth as reflected in the acquirer's share price.
• D) maximize shareholder wealth as reflected in the share price of the target firm.

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Definitions:

Payee

The party in a financial transaction who receives the payment.

Unconditional Promise

A firm commitment or guarantee without any stipulations or requirements for its fulfillment.

Delegator

A party in a contract who transfers his or her duties to perform to a third party who is not part of the original contract (a delegatee).

Endorsement

The act of signing the back of a financial document or negotiable instrument, thereby transferring rights or authorizing actions related to the document.