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:

Demand

The amount of a product or service that buyers are ready and able to buy at different price points over a specified duration.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a given price within a specified period.

Percentage Change

The extent of difference, expressed as a percentage, that represents how much a value has increased or decreased from its original amount.

Agricultural Output

The total quantity of agricultural products, such as crops and livestock, produced in a given period.