Which of the following statements is correct concerning the cost of two firms merging? The cost:
A) is fixed when the merger is financed with cash.
B) can be affected by postmerger gains if cash is used.
C) decreases as the postmerger share price increases when stock is used to finance the merger.
D) is not determined until after the merger, regardless of the type of financing.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is correct concerning the cost of two firms merging? The cost:
A) is fixed when the merger is financed with cash.
B) can be affected by postmerger gains if cash is used.
C) decreases as the postmerger share price increases when stock is used to finance the merger.
D) is not determined until after the merger, regardless of the type of financing.

Which of the Following Statements Is Correct Concerning the Cost