In a Merger or Acquisition, a Firm Should Be Acquired

question 12

Multiple Choice

In a merger or acquisition, a firm should be acquired if it:

• A)generates a positive net present value to the shareholders of an acquiring firm.
• B)is a firm in the same line of business in which the acquirer has expertise.
• C)is a firm in a totally different line of business which will diversify the firm.
• D)pays a large dividend which will provide a cash pass through to the acquirer.
• E)None of the above.