Which of the Following Statements Is Most CORRECTσ

question 19

Multiple Choice

Which of the following statements is most CORRECTσ

• A) financial theory says that the choice of how to pay for a merger is really irrelevant because, although it may affect the firm's capital structure, it will not affect its overall required rate of return.
• B) the basic rationale for any financial merger is synergy and, thus, the estimation of pro forma cash flows is the single most important part of the analysis.
• C) in most mergers, the benefits of synergy and the premium the acquirer pays over the market price are summed and then divided equally between the shareholders of the acquiring and target firms.
• D) the primary rationale for most operating mergers is synergy.
• E) the acquiring firm's required rate of return in most horizontal mergers will not be affected, because the 2 firms will have similar betas.

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Definitions:

Michael Cox

Likely refers to a notable figure; without specific context, it could point to an academic, author, or professional known by this name in a relevant field. For accurate identification, additional context is necessary.

Richard Alm

An economic journalist and author known for co-authoring publications on economic issues, notably with economist William A. "Sandy" Darity.

Consumption

The use of goods and services by households, which is a primary component of GDP.

Workers

Individuals engaged in any form of employment for compensation.