Consider the Following Equation

question 6

Multiple Choice

Consider the following equation:
<

The term T in this equation refers to

• A)the premerger,or standalone,value of the acquirer.
• B)the value of the synergies created by the merger.
• C)the premerger (standalone)value of the target.
• D)new shares to pay for the target.

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Definitions:

Profitable Output

The level of production at which a business or economic activity yields the maximum profit.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services to consumers in exchange for money.

Total Profit

The overall financial gain made by a business after subtracting all costs from the total revenue generated from its operations.

AVC

Average Variable Cost; the total variable cost divided by the quantity of output produced.