Which of the Following Statements Is False

question 20

Multiple Choice

Which of the following statements is false?

• A) SEC rules make it difficult for investors to buy much more than about 10% of a firm in secret. After an acquirer acquires such an initial stake in the target, called a toehold, they would have to make their intentions public by informing investors of his large stake.
• B) With the availability of both the freezeout merger and the leveraged buyout as acquisition strategies, most of the value added accrues to the acquiring shareholders.
• C) The laws on tender offers allow the acquiring company to freeze existing shareholders out of the gains from merging by forcing non-tendering shareholders to sell their shares for the tender offer price.
• D) Premiums in LBO transactions are often quite substantial-while they can avoid the free-rider problem acquirers must still get board approval to overcome other defenses such as poison pills, as well as outbid other potential acquirers.

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Definitions:

Adjustment

A process of altering financial records or accounts to correct any discrepancies or errors.

Supplies Expense

Costs associated with the consumable items that a business uses within its operating activities.

Cost Of Goods Sold

An accounting term for the direct costs attributable to the production of the goods sold by a company.

Inventory Items Sold

The total number of product units a company has sold to its customers during a specific period.