The Best Rationale for a Merger Is That the Value

question 76

Multiple Choice

The best rationale for a merger is that the value of the firms combined is:

• A)at least equal to the sum of their separate values.
• B)greater than the sum of their separate values.
• C)less than the sum of their separate values.
• D)None of the above

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Definitions:

Service Life

The estimated period during which an asset is expected to be usable for its intended purpose, affecting depreciation calculations.

Fair Value

An estimate of a security's worth on a given market based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.

Non-Cancelable

A contract or agreement clause indicating that the arrangement cannot be terminated before its expiration.