Which of the following would not enhance the value of a target from the acquirer's perspective?
A)Expected sales of the target have increased.
B)The subsidiary's currency is expected to strengthen aFter the acquisition.
C)The required rate of return from investing in the target has increased.
D)All of the above would enhance the value of the target.

Question

Quizplus · Accepted Answer

Option A indicates that the potential future cash flows from the target have increased, which would enhance the value of the target from the acquirer's perspective. Option B shows that the local currency will strengthen after the acquisition, which can lead to cost savings from the target's operations. However, option C suggests that the required rate of return increased from investing in the target, which would lower the value of the target for the acquirer. Therefore, option C would not enhance the value of the target. Option D is incorrect since option C does not enhance the value of the target.

Which of the Following Would Not Enhance the Value of a Target