In a merger or acquisition,a firm should be acquired if it:

Question

Quizplus · Accepted Answer

The most important factor in a merger or acquisition is whether it generates a positive net present value (NPV) for the acquiring firm's shareholders. If the NPV of the merger or acquisition is positive, it implies that the acquisition will create value for the acquiring firm's shareholders. Therefore, a firm should be acquired if it generates a positive NPV to the shareholders of an acquiring firm. Option B is partially correct, but it doesn't explain the financial benefit to the acquiring firm. Option C may also be considered, but only if it leads to positive NPV. Options D and E are incorrect.

In a Merger or Acquisition,a Firm Should Be Acquired If