Which of the Following Statements Is Correct Concerning the Cost

question 25

Multiple Choice

Which of the following statements is correct concerning the cost of two firms merging? The cost:

• A)Is fixed when the merger is financed with cash
• B)Can be affected by post-merger gains if cash is used
• C)Decreases as the post-merger share price increases when stock is used to finance the merger
• D)Is not determined until after the merger, regardless of the type of financing

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Definitions:

Absolute Threshold

The minimum amount of sensory stimulation that can be detected 50% of the time.

Difference Threshold

A measure of the smallest increase or decrease in a physical stimulus that is required to produce a difference in sensation that is noticeable 50% of the time.

Psychophysical Threshold

The minimum level of stimulus intensity perceived by the sensory system.

Just Noticeable Difference

The smallest difference in stimulation required to detect a change in sensory inputs, also known as the difference threshold.