- CFA Exams
- CFA Level I Exam
- Study Session 8. Corporate Finance (2)
- Reading 23. Mergers and Acquisitions
- Subject 8. Bid evaluation
CFA Practice Question
The absolute minimum bid that the target shareholders should accept is:
B. The pre-merger value of the target company.
C. Synergies - premium + VT.
D. VA + VT + S - C.
A. The post-merger value of the target company.
B. The pre-merger value of the target company.
C. Synergies - premium + VT.
D. VA + VT + S - C.
Correct Answer: B
The target company's management will try to negotiate the highest possible premium relative to the value.
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