One Indication That Investors Expect No Synergy from a Merger

question 61

Multiple Choice

One indication that investors expect no synergy from a merger would be that:

• A) total market value of the merged firms does not change.
• B) the P/E ratio of the merged firms changes.
• C) the acquiring firm financed the merger with cash.
• D) the merged firms are from different industries.

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Definitions:

Archetypes

Unconscious psychic structures shared by all people.

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Psychological strategies used by individuals to cope with reality and to maintain a positive self-image.

Empirical Evidence

Information obtained through observation or experimentation that serves as the basis for knowledge or justification.

Protective Strategy

A method or approach designed to safeguard or defend against potential threats, dangers, or undesirable outcomes.