If an Acquisition Does Not Create Value, Then The

question 138

Multiple Choice

If an acquisition does not create value, then the:

• A) Earnings per share of the acquiring firm must be the same both before and after the acquisition.
• B) Earnings per share can change but the stock price of the acquiring firm should remain constant.
• C) Price per share of the acquiring firm should increase because of the growth of the firm.
• D) Earnings per share will most likely increase while the price-earnings ratio remains constant.
• E) Price-earnings ratio should remain constant regardless of any changes in the earnings per share.

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