In a Related Acquisition, If There Is One Target Firm

question 72

Multiple Choice

In a related acquisition, if there is one target firm and ten bidding firms, and the value of each of the bidding firms as a stand-alone entity is $50,000 and the value of the target firm as a stand-alone entity is $30,000, the market value of the combined entity will be

• A) $0.00.
• B) less than $80,000.
• C) $80,000.
• D) more than $80,000.

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Definitions:

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of the entity.

Net Cash

The difference between an entity's total cash inflows and total cash outflows over a specific period.

Operating Activities

Activities that are directly related to the primary revenue-generating operations of a business.

Net Cash

The difference between a company’s total cash inflows and outflows within a given period, reflecting the company's liquidity position.