Consider the Following Equation: < the Term

question 16

Multiple Choice

Consider the following equation: < The term x in this equation refers to:

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

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Definitions:

10% More

Indicates an increase or addition of ten percent to a given number or value.

7% Less

A reduction by seven percent from a previous amount or value.

Standard & Poor's 500

An American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.

Stock Index

A statistical measure that shows changes in the stock market by tracking selected stocks' prices.