Which of the Following Questions Is False

question 36

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:

Psychoanalytic School

A set of psychological and therapeutic theories and methods, which originated with Sigmund Freud, emphasizing unconscious motivations and conflicts as driving human behavior.

Scientific Method

A systematic process of inquiry involving observation, hypothesis formation, experimentation, and conclusion to generate empirical knowledge.

Formulating A Hypothesis

The process of creating a testable statement or prediction, based on observations or theories, that can be investigated through experimentation or research.

Laboratory Experiment

A research method in which variables are controlled and manipulated in a structured environment to test hypotheses about cause-and-effect relationships.