When One Firm Merges with Another,the

question 62

Multiple Choice

When one firm merges with another,the:

• A) boards of directors will merge also.
• B) merger must be approved by 75% of the shareholders of the target firm.
• C) assets will be merged but the liabilities will not.
• D) target firm will cease to exist as a separate public company.

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Definitions:

Price Volatility

The degree to which the price of an asset, security, or market index moves up or down over time.

Coupon Bond

A bond that pays the holder a fixed interest payment (coupon) at regular intervals until maturity, when the principal amount is repaid.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and is to be paid.

Price Sensitive

Pertaining to stocks or securities that are highly responsive to changes or news in the market, affecting their price movements.