Which of the following statements is most CORRECT?

Regulations in the United States prohibit acquiring firms from using common stock to purchase another firm.

The equity residual method values a target firm by discounting residual cash flows at the acquiring firm's overall cost of capital reflecting the combined firm's post-merger capital structure.

A financial merger occurs when the operations of the firms involved are integrated in the hope of achieving synergistic benefits.

Defensive mergers are designed to make a company less vulnerable to a takeover.

A conglomerate merger is one where a firm combines with another firm in the same industry.