Which of the Following Is the Most Appropriate Reason for an Acquiring

question 110

Multiple Choice

Which of the following is the most appropriate reason for an acquiring firm's shareholders to prefer using stock financing for acquisitions?

• A) There is no cash outflow.
• B) It mitigates the effects of overvaluation of the target firm.
• C) It mitigates the effects of undervaluation of the target firm.
• D) It avoids dilution of shares.

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Definitions:

Media Richness

The ability of a communication medium to effectively convey information and promote understanding in a timely manner.

Employee Use

Pertains to how organizations leverage the skills, abilities, and time of their workforce to achieve business objectives and operational requirements.

E-Mail

E-mail is a system for sending messages and documents over a computer network, allowing for electronic communication between individuals.

Jargon

Specialized terminology used by a particular group, profession, or culture that may be difficult for outsiders to understand.