CFA Practice Question

There are 86 practice questions for this study session.

CFA Practice Question

In a cash offering,

I. The target's shareholders share the reward and risk related to the post-merger company.
II. Financial leverage can increase if the cash is from a debt issue.
III. Investors sometimes interpret a cash offering as a signal that the acquirer's shares may be overvalued.
A. I and II
B. II and III
C. II only
Explanation: I is wrong. All of risk is borne by the acquirer.

III is wrong. That would be true for a stock offering.

User Contributed Comments 1

User Comment
bruno5104 I Why is that so
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