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.

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Definitions:

Double-blind Procedures

are experimental protocols where neither the participants nor the experimenters know who is receiving the treatment versus the control condition, to reduce bias.

Random Assignment

A method used in experiments to place participants into groups in a way that each participant has an equal chance of being assigned to any group, ensuring unbiased distribution.

Naturalistic Observation

A research method where subjects are observed in their natural environment without any manipulation by the observer.

Case Study

An in-depth investigation or analysis of an individual, group, or event to explore causation in order to find underlying principles.