If the P/E Paid for a Target Company Is Greater

question 178

Multiple Choice

If the P/E paid for a target company is greater than the P/E of the acquiring company, the effect on the earnings per share of the acquiring company will be ________.

• A) positive
• B) neutral
• C) negative
• D) uncorrelated

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Definitions:

Geometry

The branch of mathematics concerned with the properties and relations of points, lines, surfaces, and solids.

Ammonia Molecule

A compound consisting of one nitrogen atom and three hydrogen atoms (NH3), often used in cleaning products and as a fertilizer.

Trigonal Pyramidal

A molecular geometry where a central atom is surrounded by three atoms placed at the corners of a pyramid, with a vertex missing.

Central Atom

In a molecular structure, the atom that is bonded to several other atoms.