Which one of these statements is correct?
A)The titles to the target firm's individual assets must be transferred to the acquirer in a merger.
B)If a target firm's managers oppose an acquisition,the acquisition cannot occur.
C)The acquisition of a target firm's assets can be done without the approval of the target firm's shareholders.
D)A tender offer must be accepted by all of the target firm's shareholders to be effective.
E)An acquisition of stock in a target firm may later be followed with a formal merger.

Question

Quizplus · Accepted Answer

An acquisition of stock in a target firm may later be followed with a formal merger. This is a common strategy used by acquirers to gain majority control over the target firm and eventually integrate it into their operations. Options A, B, C, and D are incorrect. A merger typically involves the transfer of ownership of the entire target firm, not just individual assets. The target firm's managers can oppose an acquisition, but this does not always prevent it from occurring. The acquisition of a target firm's assets generally requires some form of approval from shareholders or the board of directors. A tender offer only needs to be accepted by a majority of target firm shareholders to be effective, not all shareholders.

Which One of These Statements Is Correct