Why Might Shareholders of an Acquiring Firm Prefer to Finance

question 16

Multiple Choice

Why might shareholders of an acquiring firm prefer to finance mergers with stock rather than with cash?

• A) Stock financing is always less costly due to tax consequences.
• B) The EPS decreases when mergers are financed with cash.
• C) Target-firm shareholders will bear part of the cost if merger benefits were overestimated.
• D) All merger gains go to the acquirer when financed with stock.

Understand the concept and application of cross-classification tables in analyzing relationships between two nominal variables.

Interpret the relationship between gender and various factors through cross-classification tables and graphical representations.

Construct and interpret frequency distribution tables, pie charts, and bar charts.

Identify whether two nominal variables are related or not based on different analytical methods.

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Definitions:

Microtubules

Cylindrical structures that are part of the cytoskeleton in all eukaryotic cells, involved in cellular movement, shape, and division.

Nuclear Envelope

A double-membrane structure that encases the nucleus of eukaryotic cells, providing a barrier that separates the nuclear contents from the cytoplasm.

Early Prophase

The initial stage of cell division, specifically in mitosis, where chromosomes start to condense and become visible, the nuclear envelope begins to dissociate, and the mitotic spindle starts to form.

Accompanying Figure

A visual aid (such as a chart, graph, or image) that is provided alongside a piece of text to help explain or illustrate the content.