One Indication That Investors Expect No Synergy from a Merger

question 87

Multiple Choice

One indication that investors expect no synergy from a merger would be that:

• A)Total market value of the merged firms does not change
• B)The P/E ratio of the merged firms changes
• C)The acquiring firm financed the merger with cash
• D)The merged firms are from different industries

Comprehend the relationship between sales, inventory, and the financial ratios.

Understand the significance of non-cash transactions and their reflection in financial statements.

Apply ratio analysis to evaluate firm's leverage and its effects on financial performance.

Understand the use of ratio analysis in comparing firm's performance over time and against competitors.

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Definitions:

Effective

The degree to which something is successful in producing a desired or intended result.

Pay Equity Legislation

Laws designed to reduce the wage gap between genders and different ethnic groups by ensuring equal pay for work of equal value.

Job Comparison Methods

Techniques used to evaluate and compare the responsibilities, requirements, and value of jobs within an organization to ensure fair and equitable compensation.

Relative Worth

The value or importance of a job, task, or item compared to others, often assessed in the context of job evaluations or market value.