Which of the following statements about mergers is true?
A)When deciding on a merger, the acquiring firm should use its own cost of capital to evaluate the value of the acquisition.
B)A merger will add value only if synergies exist, which is why most mergers take place.
C)Most mergers result in added value because the resultant firm is more diversified than the individual firms were before the merger.
D)None of the above is a true statement.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements about mergers is true?
A)When deciding on a merger, the acquiring firm should use its own cost of capital to evaluate the value of the acquisition.
B)A merger will add value only if synergies exist, which is why most mergers take place.
C)Most mergers result in added value because the resultant firm is more diversified than the individual firms were before the merger.
D)None of the above is a true statement.

Which of the Following Statements About Mergers Is True