Which of the Following Statements Is False

question 25

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 Canadian provinces, 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:

Trade Creditors

Suppliers or vendors that allow businesses to buy goods or services on account, paying them at a later date.

Flexible Lending Arrangements

Financial agreements that offer adaptable repayment terms to accommodate the borrower's financial situation.

Asset-Based Lending

A type of financing where loans are given based on the value of an individual's or company's assets.

Loan Collateral

Assets or property pledged by a borrower to secure a loan, serving as a guarantee for the lender that the loan will be repaid.