In the case of an acquisition,with which of the following offer structures does the acquired firm bear the most risk between the time the offer is accepted and the time it is consummated?
A) Fixed stock offer
B) Floating stock offer
C) Fixed collar offer
D) Floating collar offer

Question

Quizplus · Accepted Answer

In a fixed stock offer, the acquired firm's shareholders are promised a certain number of shares of the acquiring firm. If the acquiring firm's stock price decreases between the time the offer is accepted and the time it is consummated, the value of the deal for the acquired firm's shareholders decreases, thus bearing the most risk.

In the Case of an Acquisition,with Which of the Following