In the Event That Active Corp

question 58

Multiple Choice

In the event that Active Corp.,which has a low P/E ratio,acquires Basic Corp.,which has a higher P/E ratio,we could be assured one of the following would occur.

• A) Active Corp.will have an immediate increase in EPS.
• B) Active Corp.will have an immediate decrease in EPS.
• C) Active Corp.will have an immediate increase in the growth rate of EPS.
• D) Active Corp.will have an immediate decrease in P/E.

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Definitions:

Receiver

A person or entity legally appointed to manage the financial affairs of a company or individual in cases such as bankruptcy.

Supply Chain

A network between a company and its suppliers to produce and distribute a specific product to the final buyer.

Produced

The result of manufacturing or creating goods and services through the combination of various resources.

Consumed

Utilized or used up completely, typically referring to resources, products, or services that have been utilized by end-users.