Multiple Choice
Why might shareholders of an acquiring firm prefer to finance mergers with stock rather than with cash?
A) Stock financing is always less costly due to tax consequences.
B) The EPS decreases when mergers are financed with cash.
C) Target-firm shareholders will bear part of the cost if merger benefits were overestimated.
D) All merger gains go to the acquirer when financed with stock.
Correct Answer:
Verified
Correct Answer:
Verified
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