Selling shareholders who are offered cash in a merger may be willing to part with the shares they hold because:
A) the offered shares may be less marketable.
B) a merger can create improved financing posture as a result of expansion in size.
C) they can attain a lower degree of market concentration as a result.
D) the price they are offered for their shares may be above book value or market value.

Question

Quizplus · Accepted Answer

Selling shareholders may be willing to part with their shares if they are offered a price higher than the book value or market value of their shares. This provides an opportunity for the shareholders to receive a premium on their investment, which may be attractive to them. Choices A, B, and C do not address the main reason why selling shareholders may be willing to part with their shares in a merger.

Selling Shareholders Who Are Offered Cash in a Merger May