The Shareholders of Firm a Have Offered 1 Million Shares

question 65

Multiple Choice

The shareholders of firm A have offered 1 million shares valued at $10 each to acquire firm B.After the merger is announced,stock A trades for $9 per share.Which of the following statements is not correct?

• A)Firm A appears to have overbid for firm B.
• B)The NPV of the merger may differ from expectations.
• C)Shareholders of firm A absorb all additional "cost."
• D)Firm A's stockholders are better off than if the merger were cash financed for $10 million.

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Definitions:

Hepatitis B

A serious liver infection caused by the hepatitis B virus (HBV) that can become chronic and lead to liver failure, cancer, or cirrhosis.

HBV Surface Antigen

A protein found on the surface of the hepatitis B virus; its presence in the blood indicates an active HBV infection.

Neonates

Newborn infants, especially those less than four weeks old.

Mongolian Spots

Benign, flat birthmarks with a blueish or bluish-grey coloration, commonly found on infants and usually fading over time.