If Firm a Acquires Firm B and Firm B's Shareholders

question 41

Multiple Choice

If Firm A acquires Firm B and Firm B's shareholders are given the fraction x of the combined firm, then the cost of this merger is

• A)Cost = (PVAB) - (x) PVB.
• B)Cost = (x) PVAB - PVB.
• C)Cost = PVAB - (x) PVA.
• D)Cost = (x) PVAB - (x) PVB.

---

Definitions:

Scatterplot

A type of graph used in statistics to display values for two variables for a set of data, revealing any correlational patterns.

Statistically Significant

A term indicating that a result from data analysis is unlikely to have occurred by chance.

Linear

Pertaining to or resembling a line; often used to describe relationships that can be graphically represented by a straight line.

Correlation Coefficient

The correlation coefficient is a numerical measure of some type of correlation and dependence, meaning statistical relationships between two or more variables.