What Is the Market Reaction to a Takeover Announcement

question 48

Multiple Choice

What is the market reaction to a takeover announcement?

• A)The price of the target increases by 15%,while the price of the acquirer decreases by 1%.
• B)The price of the target increases by 15%,while the price of the acquirer increases by 1%.
• C)The price of the target and acquirer both increase by 15%.
• D)The price of the target increases by 1%,while the price of the acquirer increases by 15%.

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Definitions:

Interim Period

A temporary or Middle phase in a fiscal year or financial reporting period, often used for assessing a company's performance partway through the year.

Segment Profit or Loss

The financial performance of a distinct unit within a company, often evaluated to assess its contribution to the overall business.

U.S. GAAP

United States Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in the United States.

Expenses

The costs incurred by a business in the process of earning revenue, such as rent, salaries, and utilities, excluding the cost of goods sold.