Which One of These Statements Is True

Multiple Choice

Which one of these statements is true?

A) The NPV of a merger can only be shared with the target firm's shareholders if the merger is financed with cash.
B) A cash acquisition affects the control of a bidder firm.
C) An acquisition financed with shares of stock is generally a tax-free transaction for all involved shareholders.
D) A cash acquisition causes the shareholders of the target firm to share in any merger losses.
E) A cash acquisition is less expensive than a stock acquisition to the shareholders of the acquiring firm when a merger produces a negative NPV.