Debt financing focuses management on the creation of value

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Reference no: EM131896509

1. Debt financing focuses management on the creation of value, thereby reducing conflicts of interest between managers and shareholders.

True False

2. The best way to assess whether an acquiring company is overpaying for a target company is to compare the premium being offered to those offered in similar transactions.

True False

3. Demands by the shareholders of an acquisition target to be paid in cash could leave the acquiring company with a postacquisition captial structure that could potentially reduce their shareholder value by increasing the risk of financial distress.

True False

4. The United States has a specific inter-agency committee that reviews foreign takeovers of U.S. companies on the basis of fair value.

True False

5. Outside investors require access to reliable information on a company's performance merely to measure the incentives paid to management.

True False

Reference no: EM131896509

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