JAMB Commerce 2005 Question 25

Question 25

Business Combinations

An acquired firm in a merger will always receive a

  1. A.premium
  2. B.grant
  3. C.share
  4. D.discount
Show the answer and explanation

Answer: A (premium)

Explanation

To win control, the acquiring firm pays the owners of the acquired firm more than their shares are worth on the market: a premium.