Which One of the Following Statements Is Correct

question 278

Multiple Choice

Which one of the following statements is correct?

• A) A firm must realize some synergy as a result of a merger if the earnings per share of the acquiring firm increase.
• B) Any diversification achieved through a merger is valued by investors.
• C) Any increase in earnings per share due to a merger provides financial reasoning for an increase in the stock price per share.
• D) Firms with surplus cash need to justify an acquisition as having a business purpose other than the avoidance of a dividend distribution.
• E) Diversification is one of the greatest benefits derived from an acquisition.

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Definitions:

Task Interdependence

Describes the degree to which tasks within a group or organization require coordination and cooperation among members to be completed effectively.

Different Standards

Variations in criteria or benchmarks used for comparison or judgment across different situations or by different groups.

Communication Problems

Communication problems occur when there is a failure in effectively transmitting or receiving messages, leading to misunderstandings and conflicts within an organization.

Win-lose Orientation

is a competitive mindset where a person or group views situations in terms of winning or losing, often at the expense of others.