An Appropriate Value of a Target to the Acquiring Firm

question 2

Multiple Choice

An appropriate value of a target to the acquiring firm is:

• A)the future value of the cash flow that the target can expect over the life of the target's assets.
• B)the present value of the cash flow that the target can expect over the life of the target's assets.
• C)the present value of the estimated cash flow of the firm over a five year period plus the present value of the salvage value of the target's assets.
• D)the future value of the expected cash flow from current and expected contracts of the target over the life of the target's assets.

---

Definitions:

Retail Market

The part of the economy that deals with the sale of goods or services directly to consumers, encompassing a wide range of businesses and stores.

OPEC Nations

Member countries of the Organization of the Petroleum Exporting Countries, a group that coordinates the petroleum policies of its members to secure fair and stable prices for petroleum producers.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good suppliers are willing to sell.

Mass Transit

Public transportation systems that move large numbers of people within urban and suburban areas.