Acquiring company's D/E is equal to 1, and the target company's D/E is equal to 1. If after a takeover offer announcement, the acquiring company had a new corporate debenture issue, where the cash proceeds of the capital raising were to be used by the acquirer to buy all shares in the target company, what effect (if any) would this have on the company capital structure after a successful merger?      

Answer rating: 100% (QA)

Assuming that the new corporate debenture issue does not change the capital structure of the ac... View the full answer