A Potential Merger Which Produces Synergy

question 71

Multiple Choice

A potential merger which produces synergy:

• A)should be rejected due to the projected negative cash flows.
• B)should be rejected because the synergy will dilute the benefits of the merger.
• C)has a net present value of zero.
• D)creates value and therefore should be pursued.
• E)reduces the anticipated net income from the target firm.

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