The Cost of a Merger May Outweigh the Potential Gain

question 66

Multiple Choice

The cost of a merger may outweigh the potential gain if the:

• A)Present value of the acquired firm exceeds the price paid for it
• B)Present value of the merged firms is greater than the sum of their individual values
• C)Merger allows cost savings to occur
• D)Acquired firm's shareholders receive more than the value of their firm

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Definitions:

Federal Government

The national government of a federated state, which holds the authority to govern the entire country.

Employee's Payroll

The total amount of wages, salaries, and other earnings paid to employees by a company during a specific period, including deductions for taxes and other withholdings.

Payroll Bank Account

A dedicated bank account used by businesses to manage and process employee payrolls, ensuring funds are available for direct deposits and payroll checks.

Reconciliation Functions

The process of ensuring that two sets of records or accounts are in agreement, often used in accounting to match bank statements with ledgers.