1. Shares of firms being acquired decrease after news of a merger.

True or False

2. Firm A purchases the net assets of firm B for $20 million, given that the net assets had a market value of $22 million. This transaction results in a $2 million goodwill.

True or False

3. The use of unused debt capacity is an advantage of a merger.

True or False

4. The ability to write down the value of depreciable assets is an advantage of a merger.

True or False

5. Shares of bidding firms decrease after news of a merger.

True or False