Which One of These Defines the Maximum Price That a Bidder

question 27

Multiple Choice

Which one of these defines the maximum price that a bidder should pay for a target firm?

• A)An amount equal to the premium created by a merger of the bidder and target firms
• B)Target firm's market value less the value of its long-term debt
• C)Target firm's total market value as a stand-alone entity
• D)Summation of the target firm's market value plus the merger premium minus any long-term debt
• E)Summation of the target firm's market value plus the value of the synergy created by the merger

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Definitions:

Longitudinal

A type of study or analysis that follows the same subjects over a period of time, observing changes or developments.

Cross-sectional

A research method that analyzes data collected from a diverse population at a single point in time.

Sequential

Involving or characterized by a logical order of events or a sequence where one thing follows another.

Evolutionary

Pertaining to evolution, involving the gradual development of organisms and the theory explaining the diversity of life on Earth through natural selection.