The major cost of a merger is:

Question

Quizplus · Accepted Answer

The premium the acquirer pays to the target firm is the major cost of a merger. This is the amount that exceeds the current market value of the target company, paid by the acquirer to gain control of the target company. Legal fees and restructuring costs are also significant costs, but the premium paid is typically the largest cost associated with a merger. A reduction in free cash flow may be a potential consequence of the merger, but it is not a direct cost.

The Major Cost of a Merger Is