1. (True or False): A CEO is considering how to pay for a big potential acquisition whether to use cash or stock. The acquiring company has little borrowing capacity at the moment their industry is coming out of recession. Which has also hurt their credit rating. If the CEO is honest, he thinks the companys stock is currently overvalued. The CEO should use cash consideration for the deal.

2. (True or False): A CEO is considering how to pay for a big potential acquisition whether to use cash or stock. One significant risk of this deal is the uncertainty of the valuation the company is going to make a significant investment, and there is great uncertainty as to what they are buying! The CEO should use stock consideration for the deal.

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