If Firm A acquires Firm B for cash, then the cost of the merger is equal to the cash payment minus B's value as a separate entity.

Name: If Firm A acquires Firm B for cash, then the cost of the merger is equal to the cash payment minus B's value as a separate entity.
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Question

Quizplus · Accepted Answer

The cost of the merger is the cash payment made by Firm A to acquire Firm B. The value of Firm B as a separate entity is deducted from this cash payment to determine the net cost of the merger. Therefore, the statement is true.

If Firm a Acquires Firm B for Cash, Then the Cost