Which of the following statements is true in a deal involving the exchange of acquirer shares for target shares?
A) The acquirer should consider the impact of the deal on fully diluted earnings
B) The acquirer should consider the likely conversion of "in the money" options held by target employees
C) Target convertible debt can impact the number of acquirer shares that must be issued to purchase all of the target shares outstanding
D) Target convertible preferred stock can impact the number of acquirer shares that must be issued to purchase all of the target shares outstanding
E) All of the above

Question

Quizplus · Accepted Answer

All options are true statements in a deal involving the exchange of acquirer shares for target shares.

A) The acquirer should consider the impact of the deal on fully diluted earnings because the exchange of shares will affect the acquirer's outstanding shares.

B) The acquirer should consider the likely conversion of "in the money" options held by target employees because these options can impact the potential dilution of the acquirer's shares.

C) Target convertible debt can impact the number of acquirer shares that must be issued to purchase all of the target shares outstanding because convertible debt can convert into shares of the target.

D) Target convertible preferred stock can impact the number of acquirer shares that must be issued to purchase all of the target shares outstanding because convertible preferred stock can convert into shares of the target.

Which of the Following Statements Is True in a Deal