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

question 93

Multiple Choice

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

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

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Definitions:

Gospel Book of Otto III

A medieval illuminated manuscript, richly decorated, which depicts the Gospel. It is associated with Emperor Otto III.

Ottonian Court

The Ottonian court refers to the court and culture surrounding the rulers of the Ottonian dynasty, which led the Holy Roman Empire from 919 to 1024, noted for fostering art, architecture, and scholarship.

Byzantine Constantinople

The capital city of the Byzantine Empire, known today as Istanbul, which was a significant center of Christianity, culture, and politics.

Otto II and Theophanu

A royal couple of the Holy Roman Empire in the late 10th century, noted for their reign that played a significant role in the politics and culture of medieval Europe.