In a ____, the Acquiring Company Effectively Announces That It

question 42

Multiple Choice

In a ____, the acquiring company effectively announces that it will pay a certain price above the current existing price for a merger candidate's shares.

• A) leveraged buyout
• B) tender offer
• C) equity carve-out
• D) divestiture

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Definitions:

Debt-Equity Ratio

The debt-equity ratio is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets, often used to assess financial leverage.

Residual Dividend Policy

A strategy where a company pays dividends out of the residual or leftover equity only after all project capital requirements and operational expenses are met.

After-Tax Earnings

The profit of a company after all taxes have been deducted from revenues.

Par Value

The face value of a bond or the stock value stated in the corporate charter, which may differ from the market value.