Which of the Following Actions by an Acquiring Firm Signals

question 72

Multiple Choice

Which of the following actions by an acquiring firm signals its belief that postmerger gains will be substantially larger than expected?

• A)Acquiring firm makes a stock offer,since its stock value is priced lower than it will be postmerger.
• B)Acquiring firm makes a cash offer,since this allows the acquirer to solely benefit from gains not yet reflected in the market.
• C)Acquiring firm attempts to gain majority ownership,but not complete ownership.
• D)Acquiring firm makes an offer with the condition that management must be replaced.

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Definitions:

Hans Selye

A Hungarian-Canadian endocrinologist known for his research on the physiological responses of the body to stress and the development of the general adaptation syndrome model.

Walter Cannon

A physiologist known for coining the term "fight or flight response" and his work on homeostasis.

Fight-Or-Flight Response

A biological response triggered by an apparent harmful occurrence, assault, or danger to one's continued existence.

Emotion-Focused Coping

Attempting to alleviate stress by avoiding or ignoring a stressor and attending to emotional needs related to our stress reaction.