Which of the Following Is True of the Share Price

question 11

Multiple Choice

Which of the following is true of the share price reactions to takeover bids?

• A)The combined market values of the shares of the target and bidder go up around the time of the announced bids.
• B)The share prices of target firms almost always react unfavourably to merger and tender offer bids.
• C)The bidder's share price reacts more unfavourably,on average,when the bidder makes a cash offer rather than an offer to exchange equity.
• D)Since there is a net gain to bondholders around the time of the merger announcement the share prices will go down.

---

Definitions:

Deviance

Behaviors or actions that violate societal norms or values, which can range from minor infractions to serious crimes.

Crime

Crime denotes acts that violate laws and are punishable by the state or other authority.

Powerful Groups

Entities in society with significant influence or control over resources, decision-making processes, and policy outcomes.

Norms

Generally accepted ways of doing things.