Which of the Following Is a Correct Statement

question 184

Multiple Choice

Which of the following is a correct statement?

• A) EPS growth cannot occur as the result of an acquisition.
• B) EPS growth cannot occur from an acquisition unless it creates no additional value.
• C) Stockholders can achieve diversification on their own.
• D) Diversification is usually beneficial in a merger because it reduces systematic risk.
• E) Diversification, by itself, is one reason that value may be created in a merger.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded or supplied of a good responds to a change in its price.

Golf Courses

Large areas of land designed for the sport of golf, featuring 9 or 18 holes where players aim to hit balls into each hole with the fewest number of strokes.

Movie Theaters

Entities or venues that specialize in the commercial showing of films to the public for entertainment.

Income Elasticity

A measure of how the demand for a good or service changes in response to a change in consumers' income.