Small Positive or Negative Returns to Acquiring-Company Shareholders May Be

question 24

Multiple Choice

Small positive or negative returns to acquiring-company shareholders may be explained by:

• A)tax loss benefits of a target.
• B)perceived cost reductions due to economies of scale in operations.
• C)perceived benefit of the method of financing the takeover to reduce agency costs.
• D)the over-confidence of acquiring-company management in their ability to value other companies.

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Definitions:

Comparative Negligence

A principle of tort law that reduces the amount of damages a plaintiff can recover in a negligence-based lawsuit, proportionate to the plaintiff's degree of fault.

Res Ipsa Loquitur

A legal principle that allows for the presumption of negligence in a lawsuit based on the nature of the accident, even without direct evidence of the defendant's fault.

Lack of Due Care

The failure to act with the level of care that someone of ordinary prudence would have exercised under the same circumstances, leading to negligence.

Judge and Jury

Refers to the two distinct roles in a trial, where the judge oversees legal procedures, and the jury determines facts and delivers a verdict based on evidence.