Assume Firm a Acquires Firm B

question 2

Multiple Choice

Assume Firm A acquires Firm B.As a result,the EPS of Firm A increase by 10 percent.Given this increase,you know for certain that the

• A)acquisition created synergy.
• B)purchase price was below market value.
• C)value of B to A exceeded the value of B as a stand-alone firm.
• D)acquisition provided diversification benefits.
• E)total earnings divided by the total shares increased.

---

Definitions:

Substance

A form of matter with a specific chemical composition and distinct properties, distinct from mixtures.

Chemical Sample

A small part or quantity of a chemical substance taken to show the quality or nature of the whole.

Density

Density refers to the mass per unit volume of a substance, indicating how closely packed the particles are within the material.

Liquid

A state of matter characterized by a fixed volume but no fixed shape, allowing it to flow and take the shape of its container.