CFA Practice Question

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CFA Practice Question

The absolute minimum bid that the target shareholders should accept is:

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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