An Increase in Earnings Per Share After a Merger May

question 65

Multiple Choice

An increase in earnings per share after a merger may not indicate increased value if the:

• A) number of shares has increased.
• B) price of the acquirer's stock increases.
• C) price-earnings ratios were different in the premerger firms.
• D)firm's additional earnings are spent on legal expenses of the merger.

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Definitions:

Government

The system or group of people governing an organized community, often a state, including its institutions, laws, and policies.

Plymouth Colony

An early settlement established in 1620 by English Puritans in present-day Massachusetts, known for the celebrated Thanksgiving feast.

Mayflower Compact

An agreement reached by the Pilgrims on the Mayflower in 1620, establishing self-governance in Plymouth Colony.

Civil Government

The branch of government concerned with the administration of the state, including the implementation and enforcement of laws and the management of public affairs.