The Value of a Target Firm to the Acquiring Firm

question 3

Multiple Choice

The value of a target firm to the acquiring firm is equal to:

• A)the value of the target firm as a separate entity plus the incremental value derived from the acquisition.
• B)the purchase cost of the target firm.
• C)the value of the merged firm minus the value of the target firm as a separate entity.
• D)the purchase cost plus the incremental value derived from the acquisition.
• E)the incremental value derived from the acquisition.