Consider the following equation:

Question

Consider the following equation:  <   The term S in this equation refers to:
A) the premerger (standalone) value of the target. 
B) the premerger, or standalone, value of the acquirer. 
C) the value of the synergies created by the merger. 
D) new shares to pay for the target.

Quizplus · Accepted Answer

The term S typically refers to the value of the synergies that are expected to be created by the merger. Synergies result from the combination of two companies and can lead to cost savings, increased revenue, and other benefits that can ultimately increase the value of the merged entity. In this equation, the left-hand side is less than the right-hand side, suggesting that the value of the synergies created by the merger is positive.

Consider the Following Equation: < the Term