Which of the Following Best Describes a Merger with True

question 31

Multiple Choice

Which of the following best describes a merger with true synergies?

• A)In a merger with true synergies, the pre-merger value exceeds the sum of the separate companies' pre-merger values and the dollar cost of the firms' capital.
• B)In a merger with true synergies, the post-merger value exceeds the sum of the separate companies' pre-merger values
• C)In a merger with true synergies, the post-merger value exceeds the sum of the separate companies' pre-merger values plus a risk adjusted cash flow relative to the risk of the combined firm.
• D)In a merger with true synergies, the post-merger value is less than the sum of the separate companies' pre-merger values.

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Definitions:

Evolutionary Theorists

Scholars and scientists who study how evolutionary theory, which posits that species change over time due to natural selection and genetic variation, applies to various phenomena.

Natural Selection

A process in biology where organisms with traits that better enable them to adapt to their environment have a greater chance of surviving and reproducing.

Social Coalitions

Alliances or partnerships formed between individuals or groups to achieve common goals or interests.

Functional Fixedness

Functional fixedness is a cognitive bias that limits a person to using an object only in the way it is traditionally used.