Acquisitions are especially attractive when the acquiring firm's stock price is high, because fewer shares must be exchanged to acquire the firm.

Question

Quizplus · Accepted Answer

This statement is true. When the acquiring firm's stock price is high, the value of each share is higher which means that fewer shares need to be exchanged to meet the purchase price, making the acquisition more attractive.

Acquisitions Are Especially Attractive When the Acquiring Firm's Stock Price