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If Firm a Acquires Firm B and Firm B's Shareholders

Question 25

Multiple Choice

If Firm A acquires Firm B and Firm B's shareholders are given the fraction x of the combined firm, then the cost of this merger is

A) Cost = (PV_AB) − (x) PV_B.
B) Cost = (x) PV_AB − PV_B.
C) Cost = PV_AB − (x) PV_A.
D) Cost = (x) PV_AB − (x) PV_B.

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