If an Acquiring Company Is Willing to Pay $20 Per

question 56

Multiple Choice

If an acquiring company is willing to pay $20 per share for a target's stock, and its own stock is selling for $10, which of the following is not a reasonable payment for 100 shares of the target?

• A)$2000, all cash
• B)$1000 cash and 100 shares of acquiring company's stock
• C)200 shares of acquiring company's stock
• D)$1000 in bonds and 200 shares of the acquiring company's stock

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Definitions:

Unbiased Estimator

An attribute of an estimator that ensures the expected value of the estimate equals the parameter being estimated.

Population Parameter

A numeric value that describes a characteristic of the entire population, such as the mean or standard deviation.

Unbiased Estimator

A statistical estimator that, on average, produces values equal to the parameter being estimated.

Population Parameter

A characteristic or measure that describes an aspect of an entire population, such as mean or standard deviation.