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:

Lung

A pair of respiratory organs situated within the thorax, responsible for gas exchange between the air and the blood.

Organ Systems

Groups of organs working together to perform complex functions necessary for life and health.

Metabolic Activity

Processes within living organisms that involve biochemical reactions, such as digestion, respiration, and energy production.

Endocrine

Pertaining to glands that secrete hormones directly into the blood, regulating various bodily functions such as growth, metabolism, and reproduction.