Which of the Following Statements Is Most CORRECT

question 13

Multiple Choice

Which of the following statements is most CORRECT?

• A) Regulations in the United States prohibit acquiring firms from using common stock to purchase another firm.
• B) Defensive mergers are designed to make a company less vulnerable to a takeover.
• C) Hostile mergers always create value for the acquiring firm.
• D) In a tender offer, the target firm's management always remain after the merger is completed.
• E) A conglomerate merger is one where a firm combines with another firm in the same industry.

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Definitions:

Recognized as Shareholder

Being officially acknowledged or identified as having legal ownership and rights in a corporation's shares.

Due Diligence

An investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or transaction with another party.

Business Decision

A judgment or choice made in the context of managing a company, often involving resource allocation and strategy.

Pooling Agreement

An agreement made by shareholders whereby they promise to vote the same way on a particular issue. Also called shareholder agreements and voting agreements.