The Synergy of an Acquisition Between Firm a and Firm

question 38

Multiple Choice

The synergy of an acquisition between Firm A and Firm B can be determined by:

• A) subtracting the change in cost from the change in revenue.
• B) subtracting the change in taxes from the change in revenue.
• C) subtracting the change in capital requirements from the change in revenues.
• D) discounting the change in the cash flows of the combined firm by the risk adjusted discount rate.
• E) discounting the change in the revenues of the combined firm by the risk adjusted discount rate.