Only If a Target Firm's Value Is Greater to the Acquiring

question 1

True/False

Only if a target firm's value is greater to the acquiring firm than its market value as a separate entity will a merger be financially justified.

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Definitions:

Variable Costs

Expenses that vary directly with levels of production or sales volume.

Cost Behaviour

The way in which costs change or remain stable in relation to variations in business activity levels, categorized into fixed, variable, and mixed costs.

Total Unit Costs

The complete cost incurred to produce, store, and sell one unit of a product, including direct materials, labor, and overhead.

Direct Product Cost

Costs that can be directly attributed to the production of specific goods or services, including materials and labor.