Which of the Following Questions Is FALSE

question 15

Multiple Choice

Which of the following questions 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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Definitions:

ANOVA

Short for Analysis of Variance, a statistical method used to compare means of three or more samples, testing whether at least one group differs significantly from others.

Factorial Design

Factorial design is an experimental design technique that allows the investigation of the effects of two or more independent variables on a dependent variable simultaneously.

Types of ANOVA

Different variations of Analysis of Variance, a statistical method used to compare means across multiple groups, including one-way ANOVA, two-way ANOVA, and repeated measures ANOVA.