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:

Asthenosphere

The semi-fluid layer of the Earth located below the lithosphere, allowing for plate tectonic movement.

Inner Core

The Earth's innermost layer, composed mainly of iron and nickel, solid due to extremely high pressure despite its high temperature.

Outer Atmosphere

The outermost layer of Earth's atmosphere, extending beyond the mesosphere, primarily composed of extremely low densities of hydrogen, helium, and other lighter gases.

Earth's Interior

The innermost layers of the Earth, including the crust, mantle, and core, each with distinct physical and chemical properties.