Which of the Following Statements Is Most CORRECT

question 12

Multiple Choice

Which of the following statements is most CORRECT?

• A) A defensive merger is one where the firm's managers decide to merge with another firm to avoid or lessen the possibility of being acquired through a hostile takeover.
• B) Acquiring firms send a signal that their stock is undervalued if they choose to use stock to pay for the acquisition.
• C) Cash payments are used in takeovers but never in mergers.
• D) Managers often are fired in takeovers, but never in mergers.
• E) If a company that produces military equipment merges with a company that manages a chain of motels, this is an example of a horizontal merger.