Identify the false statement. The acquirer’s price reflects a discount for controlling interest. If no active...

Identify the false statement.

The acquirer’s price reflects a discount for controlling interest. If no active market for the noncontrolling shares, the acquirers price per share less a discount for lack of control can be used. The acquirer’s price may be inflated due to demands by the acquiree’s shareholders. The acquirer’s price may be inflated due to a bidding war.

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Expert Solution

The acquirer’s price reflects a discount for controlling interest. - False Since Aquirer's price reflects the premium for controlling interest.

If no active market for the noncontrolling shares, the acquirers price per share less a discount for lack of control can be used. - True - Since there is no active control in the decision making anyone buying minority stake will alwaays want to pay lesser than the controlling entity.

The acquirer’s price may be inflated due to demands by the acquiree’s shareholders. True. With more dilution the share holders are in demand and hence there could be some inflation.

The acquirer’s price may be inflated due to a bidding war. - True. In case of a bidding war, the company's price are obviously to get inflated.

ekkarill92 answered 1 year ago

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