The Shareholders of Firm a Have Offered One Million Shares

question 62

Multiple Choice

The shareholders of firm A have offered one million shares valued at $10 each to acquire firm B) After the merger is announced, stock A trades for $9 per share. Which of the following statements is not correct?

• A) Firm A appears to have overbid for firm B
• B) The NPV of the merger may differ from expectations
• C) Shareholders of A absorb all additional "cost"
• D) A's stockholders are better off than if the merger were cash financed for $10 million

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Definitions:

Personal Gain

Advantages or benefits obtained for oneself, often through self-interested actions.

Ethical Choices

Decisions made based on moral principles and values, often reflecting considerations of what is right and fair.

Production Line

A manufacturing process where parts are added in a sequential manner to produce a final product efficiently.

Different Code Of Ethics

Distinct sets of principles and values that guide the behavior of individuals or members of a profession.