In a Merger The

question 32

Multiple Choice

In a merger the:

• A)legal status of both the acquiring firm and the target firm is terminated.
• B)acquiring firm retains its name and legal status.
• C)acquiring firm acquires the assets but not the liabilities of the target firm.
• D)stockholders of the target firm have little,if any,say as to whether or not the merger occurs.
• E)target firm always continues to exist as a subsidiary of the acquiring firm.

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Definitions:

Net Present Value

This represents the discrepancy between what cash comes in at its current value and what cash goes out at its current value over an allocated period.

Market Value Per Share

The current price at which a company's stock is trading on the open market.

Equipment

Tangible assets used in operations, such as machinery or tools, which play a crucial role in the production or service process.

Rights Offering

A corporate issuance of rights to current shareholders allowing them to purchase additional shares directly from the company at a discount to the current market price.