In terms of shareholder approval requirements, the main difference between a cash transaction and a share transaction is:
A)The approval of both sets of shareholders is often required for a cash transaction, but not for a share transaction.
B)The approval of both sets of shareholders is often required for a share transaction, but not for a cash transaction.
C)No approval is required for share transactions where the deal value is less than 50% of the value of shares outstanding.
D)The approval of the acquiring firm's shareholders is required for a cash transaction.

Question

Quizplus · Accepted Answer

In a share transaction, both sets of shareholders are often required to approve the deal, as the transaction involves the issuance or transfer of shares in the company, which affects the ownership structure. In a cash transaction, the acquiring firm's shareholders may need to approve the deal, but the target firm's shareholders may not necessarily require approval, as there is no change in ownership structure. Therefore, option B is the correct answer.

In Terms of Shareholder Approval Requirements, the Main Difference Between