Which of the Following Statements Seems Most Correct About a Firm

question 89

Multiple Choice

Which of the following statements seems most correct about a firm that has made a cash tender offer for 2 million shares of ABC Corp.at a price of $20,which is $6 higher than ABC's current value?

• A) The economic gain of the merger exceeds $40 million.
• B) The economic gain of the merger exceeds $28 million.
• C) The economic gain of the merger exceeds $12 million.
• D) The economic gain of the merger would be zero after accounting for merger cost.

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Definitions:

Price Level

A measure of the average prices of goods and services in an economy at a given time, impacting purchasing power and inflation.

Nominal GDP

Current price-based valuation of every final good and service produced within a nation's boundaries in a set timeframe.

Real GDP

Real Gross Domestic Product (GDP) measures the value of all finished goods and services produced within a country's borders, adjusted for inflation, within a specific time period.

Price Level

The averaged-out price for the total spectrum of goods and services in the economy.