All of the Following Statements Are Correct EXCEPT

question 74

Multiple Choice

All of the following statements are correct EXCEPT:

• A) immediately after the announcement of a planned acquisition, the stock price of the majority of acquiring firms declines.
• B) shareholders of acquired firms often earn above-average returns from an acquisition.
• C) the majority of acquisitions increase long-term value for the acquiring firm.
• D) shareholders of acquiring firms typically earn returns from the transaction that are close to zero.

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Definitions:

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since the asset was acquired and put into use.

Fixed Asset

Long-term tangible assets used in the operations of a business that are not expected to be converted to cash in the short term.

Book Value

The net value of an asset or company, calculated by subtracting liabilities from assets and often used to assess the worth of tangible assets on balance sheets.

Depreciable Asset

An asset subject to depreciation, representing its decline in value over time due to use or obsolescence.