Question

Which answers below reflect decisions that boards and shareholders of a public company must make when considering a merger or aquisition.

a. how difficult is it to achieve the expected synergies after the acquisition.
b. if the acquiring company's shares are valued fairly.
c. how likely the shares of the acquiring company are to drop before closing.
d. if the acquiring company will issue a fixed number of shares, or a whether the company will issue shares for a fixed value

Answer 1

Boards and shareholders must decide on the difficulty of achieving synergies, fair valuation of shares, potential share value fluctuations, and the share issuance structure in a merger or acquisition. Option A is correct.

Step-by-step explanation:

When considering a merger or acquisition, boards and shareholders of a public company must make several decisions. Among the choices provided:

Assessing the difficulty of achieving expected synergies after the acquisition is crucial, as it can affect the overall success of the merger.

Evaluating if the acquiring company's shares are valued fairly helps determine the exchange ratio and preserve the interests of current shareholders.

Considering the likelihood of shares dropping before closing can affect the deal terms and the timing of the merger.

Deciding whether the acquiring company will issue a fixed number of shares, or shares for a fixed value, is important as it influences the ownership structure post-merger.

The decision-making process involves anticipating the outcomes and complexities of merging entities and determining the financial mechanics of the deal.