When Shares Are Issued by a Parent Company as Consideration

question 41

True/False

When shares are issued by a parent company as consideration for the acquisition of a wholly owned subsidiary, the parent's EPS figures will always decline in the short term.This is because the subsidiary's earnings will only be added to the parent's earnings in the following period.

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Definitions:

Amplitude

In physics, it refers to the maximum extent of a vibration or oscillation, measured from the position of equilibrium.

Brightness

The perception of light intensity, often described in terms of the amount of light emitted or reflected by an object.

Colour

The characteristic of visual perception described through categories with names such as red, blue, yellow, etc., primarily caused by the spectrum of light interacting with the photoreceptor cells of the eye.

Saturation

The intensity or purity of a color, indicating the absence of white light.