The actual price paid by the buyer for the target firm is determined when
A. The initial offer is made
B. As a result of the negotiation process
C. When the letter of intent is signed
D. Following the completion of due diligence
E. Once a financing plan has been approved
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All of the following are true about a confidentiality agreement except for
A. Often applies to both the buyer and the seller
B. Stipulates the type of seller information available to the buyer and how the information can be used
C. Limits the use of information about the seller that is publicly available
D. Includes a termination date
E. Limits the ability of either party to disclose publicly the nature of discussion between the buyer and seller
All of the following statements are true about letters of intent except for
Are always legally binding
B. Spells out the initial areas of agreement between the buyer and seller
C. Defines the responsibilities and rights of the buyer and seller while the letter of intent is in force
D. Includes an expiration date
E. Includes a “no shop” provision
Initial contact should be made through an intermediary as high up in the organization for which of the following firms
A. Companies with annual revenue of less than $25 million
B. Medium sized companies between $25 and $100 million in annual revenue
C. Large, publicly traded firms
D. Small, privately owned firms
E. Small, privately owned competitors
The screening process represents a refinement of the search process and commonly utilizes which of the following as selection criteria
A. Market share, product line, and profitability
B. Product line, profitability, and growth rate
C. Profitability, leverage, and growth rate
Degree of leverage, market share, and growth rate
E. All of the above