Question

During mergers and acquisitions the value of the combined entity is expected to be greater than the sum of the independent values of the merging firms.
(True/False)

Answer 1

Answer:

false

Explanation:

Answer 2

“During ‘mergers and acquisitions’ the value of the combined entity is expected to be greater than the ‘sum of the independent values’ of the merging firms” is a TRUE statements.

Explanation:

• During mergers and acquisitions the value of the combined ‘entity increases’ in a number of ways that include using the combined expertise of both the companies.  

• They together would capture new markets which will, in turn, increase the profits and value for the shareholders.  

• The mergers help to increase the ‘market share’ by enhancing the offering of products and services in the market.  

• They add to the enhancement of shareholder value with different tax benefits in the company.

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