Which of the Following Statements Is FALSE

question 34

Multiple Choice

Which of the following statements is FALSE?

• A)Once the acquirer has completed the valuation process,it is in the position to make a tender offer- that is,a public announcement of its intention to purchase a large block of shares for a specified price.
• B)If we view the pre-bid market capitalization as the stand-alone value of the target,then from the bidder's perspective,the takeover is a positive-NPV project only if the synergies created do not exceed the premium it pays.
• C)Purchasing a corporation usually constitutes a very large capital investment decision,so it requires a more accurate estimate of value that includes careful analysis of both operational aspects of the firm and the ultimate cash flows the deal will generate.
• D)A stock-swap merger is a positive-NPV investment for the acquiring shareholders if the share price of the merged firm (the acquirer's share price after the takeover)exceeds the premerger price of the acquiring firm.

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