In the Case of a Merger That Is Stock Financed,the

question 28

Multiple Choice

In the case of a merger that is stock financed,the merger cost may change if the:

• A) value of the target firm's shares changes after the merger announcement.
• B) value of the acquiring firm's shares changes after the merger announcement.
• C) long-term interest rates increase.
• D) merger is either horizontal or vertical.

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Definitions:

Construct Validity

The extent to which a test measures what it claims to be measuring, indicating the accuracy of the construct it represents.

Operational Definitions

Observable operations, procedures, and measurements that are based on the independent and dependent variables.

Internal Validity

The extent to which a study can demonstrate a causal relationship between variables, minimizing the influence of external factors.

Independent Variable

A variable that is manipulated or changed in an experiment to observe its effects on a dependent variable.