The Following Situations Typically Require That the Financial Manager Value

question 40

Multiple Choice

The following situations typically require that the financial manager value an entire business:

• A)If firm A is about make a takeover offer for firm B, then A's financial managers have to decide how much the combined business A + B is worth under A's management.
• B)If firm A is about make a takeover offer for firm B, then A's financial managers have to decide how much the combined business A + B is worth under A's management; and if firm C is considering the sale of one of its divisions or a business line, it has to decide what the division or the business line is worth in order to negotiate with potential buyers.
• C)When a firm goes public, the investment bank must evaluate how much the firm is worth in order to set the price.
• D)If firm A is about make a takeover offer for firm B, then A's financial managers have to decide how much the combined business A + B is worth under A's management; if firm C is considering the sale of one of its divisions or a business line, it has to decide what the division or the business line is worth in order to negotiate with potential buyers; and when a firm goes public, the investment bank must evaluate how much the firm is worth in order to set the price.

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