A Competent Merger Analysis Calculates the Maximum Per Share Price

Multiple Choice

A competent merger analysis calculates the maximum per share price that should be paid for an acquisition as:

A) the pre-merger market price plus the per share value of synergies.
B) the NPV of the incremental cash flows coming from the acquisition divided by the number of shares of the target's stock that are outstanding.
C) the targets terminal value.
D) the NPV of the target's terminal value divided by the number of share tendered.