It Is Possible to Merge with a Company So That

question 78

True/False

It is possible to merge with a company so that the merger results in the same earnings per share but still lowers the new firm's cost of capital.

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Definitions:

Rationing Mechanism

A system or method used to allocate scarce goods, services, or resources among people with competing demands.

Market Economies

Economic systems where decisions on production, investment, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Price

The fund amount deemed necessary, expected, or allocated for a service or good.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price point, at a given time.