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:

Suppliers

Entities that provide goods or services to another entity, typically within a supply chain or business process.

Bullwhip Measure

Refers to the calculation of the variation in demand and inventory levels within a supply chain, illustrating how slight changes in consumer demand can lead to larger variances in orders placed upstream.

Dampening Scenario

A situation where fluctuations in demand or supply are reduced or stabilized to minimize the impact on operations or planning.

Bullwhip Measure

A metric that quantifies the increase in variability or fluctuations in order and inventory levels observed as one moves up the supply chain from retailers towards manufacturers.