A merger agreement provides for a cash and stock mix, where each target share will be exchanged for $10 in cash plus 0.3 shares of the acquirer's stock. If the acquirer's share price declines significantly before closing, what is the potential risk to target shareholders in this structure?

1. ATarget shareholders will receive additional cash to compensate for the drop.
2. BThe acquirer must increase the share ratio to ensure a fixed total value.
3. CThe value of consideration received by target shareholders will decrease.✓ Correct answer
4. DTarget shareholders can opt out of the merger for a fixed payment.

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