Which of the Following Is NOT a Purpose of a Break

question 82

Multiple Choice

Which of the following is NOT a purpose of a break fee?

• A)To reward the original acquirer for generating a competing bid.
• B)To compensate the original acquirer for the costs incurred in negotiations.
• C)To signal the high value of the target firm to the original acquiring firm.
• D)To reduce the probability that a potential acquirer will back out of negotiations.

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Definitions:

Check Stub

A check stub is the part of a check that is kept as a record by the issuer, detailing the amount, date, and payee of the check.

Cash Balance

The amount of currency that a company or individual has on hand, including deposits in bank accounts that are available for immediate use.

Deposit

A sum of money placed into an account or given as partial payment to secure a purchase or service.

Check Register

A record of checks written, deposits made, and balances for a checking account.