alleryStart learning →The purpose of due diligence in an M&A deal is to
ASetting the tax rate
BListing the shares
CFixing the board size
DValidating assumptions
Answer & Solution
Correct answer: D. Validating assumptions
Due diligence checks the assumptions behind the deal using lawyers, accountants and tax advisors, and so lowers risk.
Keep practising Mergers Acquisitions and Corporate Restructuring
Browse all Mergers Acquisitions and Corporate Restructuring questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
In a management buy-in (MBI), the shares are bought bySenior LBO debt is secured and carriesWhich target suits an LBO best?Debt is cheaper than equity in an LBO since interestIn a leveraged buyout, the target's assets often serve asWhich US law requires shareholder votes on future golden parachutes?A golden parachute pays an executive onA gray knight is a bidder seen as