Which of the Following Statements Is False

question 5

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 16% 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:

Paid-In-Full

A status indicating that a debt or obligation has been completely settled or paid off.

Accord And Satisfaction

A legal agreement between parties to settle a dispute where the debtor agrees to pay a defined amount less than the creditor claims, which once paid, fulfills the obligation.

Accord And Satisfaction

A legal contract whereby a dispute is settled by the parties involved agreeing to give and accept something in settlement of the claim and thus satisfying both sides.

Unliquidated Debt

An obligation whose precise financial amount is yet to be established.