The shareholders of firm A have offered 1 million shares valued at $10 each to acquire firm B. After the merger is announced, stock A trades for $9 per share. Which of the following statements is false?
A) Firm A appears to have overbid for firm B.
B) The NPV of the merger may differ from expectations.
C) Shareholders of firm A absorb all the additional "cost."
D) Firm A's stockholders are better off than if the merger were cash financed for $10 million.
Correct Answer:
Verified
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