Consider the Following Equation: the Term S in This Equation

question 4

Multiple Choice

Consider the following equation: The term S in this equation refers to

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

---

Definitions:

Public Markets

Marketplaces that are open to the public where securities, commodities, and other financial instruments are traded.

Market Value

The contemporary pricing for transactions involving assets or services on the market.

Stock Split

A corporate action that increases the number of a company's outstanding shares by issuing more shares to current shareholders, thus reducing the price of each share.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.