Which of the Following Statements Is FALSE

question 15

Multiple Choice

Which of the following statements is FALSE?

• A)In practice,most acquirers pay a substantial acquisition premium,which is the percentage difference between the acquisition price and the premerger price of the target firm.
• B)When a bid is announced,the target shareholders enjoy a gain of 15% on average in their stock price.
• C)In most U.S.states,the law requires that when existing shareholders of a target firm are forced to sell their shares,they receive the market price for their shares.In most cases,this concept is interpreted as the value inclusive of any value that arises because of the merger itself.
• D)A bidder is unlikely to acquire a target company for less than its current market value.

---

Definitions:

TFC

Total Fixed Costs, which are expenses that do not change regardless of the level of production or business activity.

Marginal Cost

Marginal cost is the change in total production cost that arises when the quantity produced is incremented by one unit.

Variable Inputs

Inputs in production that can be adjusted based on the production volume, including labor hours and raw materials, distinguishing them from inputs that remain constant.

Labor

The effort involving both bodily and intellectual activities applied in generating goods and services.