Economics · Corporate Finance
In corporate acquisitions and dividend policies, which of the following statements is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1An unlisted company's shares will trade at a premium to similar listed shares because it has a lower cost of equity
- 2Scrip dividends decrease the liquidity of shares by retaining cash in a company
- 3An acquiring company usually has to pay a higher price per share to take control of a target company than if it were buying a minority holding✓
- 4An unlisted company is easier to value than a listed company because it has fewer shareholders
Correct answer
An acquiring company usually has to pay a higher price per share to take control of a target company than if it were buying a minority holding
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