Which of the Following Statements Is False

question 14

Multiple Choice

Which of the following statements is false?

• A) There are two primary mechanisms by which ownership and control of a public corporation can change: Either another corporation or group of individuals can acquire the target firm, or the target firm can merge with another firm.
• B) Merger activity is greater during economic contractions than during expansions.
• C) Mergers and acquisitions are part of what is often referred to as "the market for corporate control."
• D) The takeover market is also characterized by merger waves peaks of heavy activity followed by quiet troughs of few transactions.

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Definitions:

Incremental Borrowing Rate

This is the interest rate a company would have to pay if it borrows funds to finance a lease transaction, used in lease accounting to measure lease liabilities under accounting standards.

Implicit Rate

An interest rate implicit in the terms of a lease or other contract, representing the lessor's cost of capital or the lessee's incremental borrowing rate, not explicitly stated.

Leveraged Lease

A leasing arrangement in which the lessor uses borrowed funds to acquire the asset that is then leased out, allowing the lessor to benefit from tax advantages and leverage.

Operating Lease

A contract that allows for the use of an asset but does not transfer ownership of the asset to the lessee.