Which One of These Statements Is Correct

question 42

Multiple Choice

Which one of these statements is correct?

• A)Cash acquisitions provide greater benefits to acquiring shareholders than stock acquisitions when V_AB < V_A + V_B.
• B)Cash acquisitions with positive NPVs are more expensive than comparable stock acquisitions to the acquiring shareholders.
• C)Acquiring firms dilute ownership when an acquisition is an all-cash transaction.
• D)The cost of a cash acquisition is dependent upon the acquisition gains.
• E)The acquiring firm's shareholders are better served if a negative NPV acquisition is a stock,rather than a cash,transaction.

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Definitions:

Cost of Goods Sold

Cost of Goods Sold (COGS) is the direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Miscellaneous Expenses

Expenses that don't fit into any specific category within the company's budget, often small or irregular in nature.

Financial Statements

Formal records that outline the financial activities and condition of a business, entity, or individual.

Net Income

The remaining earnings of a business after subtracting all outgoings and tax liabilities from its total earnings.