Which One of These Statements Is Correct

question 49

Multiple Choice

Which one of these statements is correct?

• A)Cash acquisitions provide greater benefits to acquiring shareholders than stock acquisitions when V_AB < V_A + V_B.
• B)Cash acquisitions with positive NPVs are more expensive than comparable stock acquisitions to the acquiring shareholders.
• C)Acquiring firms dilute ownership when an acquisition is an all-cash transaction.
• D)The cost of a cash acquisition is dependent upon the acquisition gains.
• E)The acquiring firm's shareholders are better served if a negative NPV acquisition is a stock,rather than a cash,transaction.

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Definitions:

Presidential Election

An electoral process in which citizens vote to elect an individual to serve as the head of the government or the state.

Availability Heuristic

A strategy in which one estimates the frequency or probability of an event by the ease with which mental operations, such as retrieval of examples and construction of examples, can be carried out.

Frequency

In general terms, it refers to how often something occurs within a specific interval or context, such as the number of repetitions of a wave per second in physics.

Expected Utility Theory

A normative model of decision making in which the decision maker weighs the personal importance and probabilities of different outcomes in choosing among alternatives in order to maximize overall satisfaction of personal goals.