Which of the Following Is FALSE About the Friendly Acquisition

question 84

Multiple Choice

Which of the following is FALSE about the friendly acquisition process?

• A)A friendly acquisition involves estimating the value of the firm using information provided by the firm.
• B)The due diligence process is the investigation of the correctness of information provided by the target.
• C)The no-shop clause prohibits the acquiring firm to look into other target firms.
• D)The confidentiality agreement prohibits the disclosure of private information about the target firm.

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Definitions:

Consolidated Balance Sheet

A balance sheet that provides a financial snapshot of a parent company and its subsidiaries as one single entity, consolidating all assets, liabilities, and equity.

Equipment

Tangible property used in the operation of a business that is not intended for sale in the ordinary course of business.

Acquisition Differential

The disparity between the acquisition cost and the fair market value of the identifiable net assets obtained.

Cumulative Preferred Shares

Type of preferred stocks where dividends accumulate if not paid in a given year, and must be paid out before common stock dividends can resume.