Which One of the Following Is False Concerning a Proposed

question 71

Multiple Choice

Which one of the following is false concerning a proposed merger of firms?

• A) The acquired firm will cease to exist.
• B) Shareholders of the acquired firm may receive securities in the acquiring firm.
• C) Mergers are sometimes combinations of equals.
• D) Shareholder approval to merge is not required.

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Definitions:

Bond Duration

A measure of the sensitivity of a bond's price to changes in interest rates, expressed in years.

Time To Maturity

The remaining duration until the expiration date of a financial instrument, when its principal is due to be paid to holders.

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the bond's face value, and paid to bondholders at specified intervals until maturity.

Coupon Bond

A bond that entitles the holder to a fixed interest payment, or coupon, periodically until the bond matures.