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:

Absorb Minerals

The process by which organisms take in minerals from their surrounding environment or diet for bodily functions.

Node

In plants, the place where one or more leaves attach to a stem.

Axillary Bud

Bud located in the axil of a leaf.

Bud Scale

A small protective covering over a bud that shields it from the elements and pathogens.