Which One of the Following Statements Is Correct Concerning the Cost

question 42

Multiple Choice

Which one of the following statements is correct concerning the cost of two firms merging? The cost:

• A) is fixed when the merger is financed with cash.
• B) can be affected by postmerger gains if cash is used.
• C) decreases as the postmerger share price increases when stock is used to finance the merger.
• D) is not determined until after the merger, regardless of the type of financing.

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Definitions:

Private Thought Processes

Private thought processes refer to the internal, mental activities individuals engage in, such as reasoning, reflecting, and planning, which are not observable by others.

Skinner

Refers to B.F. Skinner, a renowned psychologist best known for his work in behaviorism and the development of the theory of operant conditioning.

Conditioned Stimuli

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, elicits a conditioned response.

Latent Learning

The subconscious retention of information without immediate or apparent reinforcement or application, which can later be demonstrated when needed.