Is each of the following statements true or false? Explain your answers briefly.
a. On average, acquisitions destroy shareholder value.
b. A discounted cash flow valuation of a target company discounts the target’s estimated free cash flows at the acquirer’s cost of capital.
c. An acquirer should be willing to pay a higher control premium for a well-managed company than a poorly managed one.
d. The liquidation value of a company’s shares always places a floor under its stock price.
e. An unusually low stock price in managements’ eyes encourages management to take the company private in a management buyout.
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