Which One of These Statements Is Correct Regarding Acquisitions

question 53

Multiple Choice

Which one of these statements is correct regarding acquisitions?

• A) The cost of a cash acquisition to the acquiring firm is equal to the cash paid minus the taxes incurred by the target firm's shareholders.
• B) Neither cash nor share acquisitions affect the control of the acquiring firm.
• C) Share financing is generally more common than cash financing for smaller acquisitions.
• D) Target firm shareholders share in both the gains and losses resulting from a stock acquisition.
• E) Cash acquisitions create a tax liability for the acquiring firm's shareholders.

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Definitions:

Flexible Organization Structure

Describes an organizational framework that can easily adapt to changes, allowing for modifications in structures and processes.

Horizontal Differentiation

The division of roles and responsibilities within an organization that focuses on the specialization and expertise of its members, rather than their rank or status.

Vertical Differentiation

The way an organization structures its hierarchy of authority, creating levels of management and rank within the company.

Charles Perrow

An American sociologist known for his theoretical contributions to the study of organizations, particularly the concept of "normal accidents."