Which of the Following Statements Is FALSE

question 47

Multiple Choice

Which of the following statements is FALSE?

• A)All else being equal,larger firms,because they are more diversified,have an increased probability of bankruptcy.
• B)To justify a takeover based on operating losses,management would have to argue that the tax savings are over and above what the firm would save using carryback and carryforward provisions.
• C)It is possible to combine two companies with the result that the earnings per share of the merged company exceed the premerger earnings per share of either company,even when the merger itself creates no economic value.
• D)When an acquirer buys a private target,it provides the target's owners with a way to reduce their risk exposure by cashing out their investment in the private target and reinvesting in a diversified portfolio.

---

Definitions:

Afterbirth

The placenta and other materials expelled from the uterus following the birth of a baby.

Conceive

To become pregnant or to form a new idea or plan in the mind.

Exposure

The condition of being subject to something which may have an impact, such as disease or elements, or gaining experience in a certain field.

Lead

A chemical element with the symbol Pb that is used in various industries but is toxic to humans and animals when ingested or inhaled.