What happens to the outstanding shares of the target firm

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Reference no: EM131568413

What happens to the outstanding shares of the target firm when the acquirer purchases 100% of the target’s outstanding stock?

They are added to the number of shares of Acquirer stock outstanding

They are cancelled.

They are converted into preferred stock.

They are shown as treasury stock on the books of the combined companies.

They are swapped for debt in the new company.

Select one and explain.

Reference no: EM131568413

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