ABC CorpHas Offered One Million Shares Having a Total Market Value

question 62

Multiple Choice

ABC Corp.has offered one million shares having a total market value of $8 million for XYZ Corp.After the merger is announced, shares in ABC trade for $7 each.If ABC is confident about XYZ's value, what has happened to the cost of the merger?

• A)It increases by $1 million
• B)It decreases by $1 million
• C)It increases by $9 million
• D)It remains constant

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Definitions:

Economic Change

Alterations in the economic conditions or environment, such as growth, recession, inflation, or changes in market demand.

Market Opportunities

Refers to favorable external factors that could help an organization to grow its market share.

Income and Wealth

Income refers to the flow of money received, typically on a regular basis, while wealth represents the accumulation of valuable resources or assets.

Cost Control

The practice of managing and monitoring expenses to keep them within the defined budget, ensuring that a project or operation remains financially viable.