Which of the Following Is Not a Factor That Makes

question 183

Multiple Choice

Which of the following is not a factor that makes valuing a target's stock difficult and imprecise?

• A)It's hard for an acquirer to get an accurate forecast of the target's future cash flows.
• B)Terminal values vary dramatically in response to small changes in assumptions.
• C)The acquirer's management generally doesn't know anything about the target's line of business.
• D)Estimating a risk adjusted discount rate for the analysis is inherently imprecise.

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Definitions:

Intergroup Dynamics

The underlying processes and interactions that occur between different groups, including cooperation, competition, and conflict.

Sociology

The science of society.

Group Dynamics

The patterns of interaction and relationships that influence the behavior and effectiveness of a group.

External Perspective

Viewing an organization or situation from the outside to gain an unbiased understanding or to assess impacts that come from external sources.