-Which of the Following Would Be True Concerning the EPS

question 2

Multiple Choice

$$\begin{array} { l r r } &\underline{ \text { Company A }} &\underline{ \text { Company B }} \\\text { Total earnings } & \$ 2,000,000 & \$ 1,000,000 \\\text { Number of shares outstanding } & 400,000 & 100,000 \\\text { Earnings per share } & \$ 5.00 & \$ 10.00 \\\text { Price/earnings } & 6 \mathrm { X } & 3 \mathrm { X } \\\text { Market price/share } & 30.00 & \$ 30.00\end{array}$$
-Which of the following would be true concerning the EPS of Company A.in 5 years? Company A's EPS would be:

• A) higher due to the merger.
• B) the same with or without the merger.
• C) lower without the merger.
• D) lower with the merger.

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Definitions:

Group Deliberations

The process of discussing and considering various perspectives and options within a group to reach a collective decision.

Normative Decision Model

A framework that suggests leaders can improve decision-making by matching their style to the characteristics of the situation.

Decision-Making Styles

The typical manner in which an individual perceives and resolves dilemmas, including how they gather and assess information.

Path-Goal Theory

A theory that focuses on how leaders can motivate their followers to achieve goals and perform at their best by selecting specific behaviors that are best suited to the followers' needs and the working environment.