Consider the Following Two Statements: (I) in the Presence of a U-Shaped

question 4

Multiple Choice

Consider the following two statements: (i) In the presence of a u-shaped average cost curve, you are willing to pay a premium for a target if
It brings you closer to the optimal size.
(ii) In the presence of a u-shaped average cost curve, firms operating at minimum average cost are
Most likely to be acquirers.

• A)(i) is correct, (ii) is incorrect.
• B)(ii) is correct, (i) is incorrect.
• C)Both (i) and (ii) are correct.
• D)Both (i) and (ii) are incorrect.
• E)(i) and (ii) only hold in a hostile takeover.

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Definitions:

Gratuitous

Given or done free of charge or without receiving any value in return.

Apparent Authority

Apparent Authority refers to a situation where a person appears to have the authority to act on behalf of another person or entity, leading third parties to believe that authority exists based on the conduct or statements of the principal.

Implied Authority

The authority of an agent to perform acts that are necessary or customary to carry out expressly authorized duties.

Subagent

An agent appointed by another agent, with the authority to perform tasks or activities on behalf of the original agent's principal.