According to the free-cash-flow theory of takeovers,postmerger gains in market value represent:

Question

Quizplus · Accepted Answer

According to the free-cash-flow theory of takeovers, postmerger gains in market value represent the present value of free cash flow that will no longer be misused. This means that the acquiring company will be able to use the excess cash flow from the target company more efficiently and effectively, which in turn adds value to the acquiring company. Therefore, the correct answer is C.

According to the Free-Cash-Flow Theory of Takeovers,postmerger Gains in Market