Which One of the Following Statements Is Correct

question 35

Multiple Choice

Which one of the following statements is correct?

• A) An increase in the earnings per share as a result of an acquisition will increase the price per share of the acquiring firm.
• B) The price-earnings ratio will remain constant as a result of an acquisition which fails to create value.
• C) If firm A acquires firm B then the number of shares in AB will equal the number of shares of A plus the number of shares of B.
• D) If no value is created when firm A acquires firm B, then the total value of AB will equal the value of A plus the value of B.
• E) Diversification is one of the greatest benefits derived from an acquisition.

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Definitions:

Strategic Priority Analysis

The process of identifying and evaluating the importance and urgency of different strategic initiatives or actions to achieve business objectives.

Integrated Analysis

Integrated analysis is a comprehensive examination that combines various data sources and methodologies to gain a complete understanding of a complex problem or situation.

Dissonance Analysis

The examination of inconsistencies between beliefs and behaviors, often applied in marketing to understand consumer decision-making processes.

Situation Assessment

An evaluation of the current state or conditions affecting a scenario or decision-making process.