A common procedure to determine the value of a merger candidate is to estimate the present value of discounted cash flows and the expected after-tax earnings attributable to the merger.This can be done on all of the following levels except:
A)Optimistic.
B)Pessimistic.
C)Probable scenarios.
D)Logical scenarios.

Question

Quizplus · Accepted Answer

The common procedure to determine the value of a merger candidate considers the present value of discounted cash flows and expected after-tax earnings, which can be estimated using optimistic, pessimistic, and probable scenarios. The option of logical scenarios is not mentioned as a level for this estimation. Therefore, the correct answer is option D.

A Common Procedure to Determine the Value of a Merger