FIN 351 TEXT QUIZ CHAPTER 10

1 In an efficient market environment it is reasonable to assume that the higher the premium on a target
companys stock the less the risk of cancellation
True False
2. There is rarely a significant change in stock price when an OTC stock becomes listed on a national
exchange.
True False
3. Cash tender offers in mergers have tax advantages as compared to stock tender offers.
True False
4. The greatest profit, and the greatest risk, arises from trying to identify an acquisition candidate before
the announcement.
True False
5. The stock price of an acquiring company generally changes parallel to that of the target.
True False

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