The amount paid by an acquirer to the shareholders of the acquired firm that exceeds the stand-alone value is called the:
A) Green mail.
B) Golden parachute.
C) Goodwill.
D) Poison put.
E) Merger premium.

Question

Quizplus · Accepted Answer

The amount paid by an acquirer to the shareholders of the acquired firm that exceeds the stand-alone value of the firm is known as the merger premium. This reflects the additional value the acquirer sees in the firm beyond its current market value, often due to synergies, strategic advantages, or other factors that the acquirer believes will make the combined entity more valuable.

The Amount Paid by an Acquirer to the Shareholders of the Acquired