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

question 105

Multiple Choice

If the P/E paid for a target company is equal to 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:

Respiration

The process of breathing, involving the inhalation of oxygen and the exhalation of carbon dioxide, crucial for cellular metabolism.

Excitability

The capability of a cell to respond to a stimulus, characteristic of nerve and muscle cells.

Nervous System

The nervous system is the network of nerve cells and fibers that transmits nerve impulses between parts of the body, coordinating bodily functions and responding to internal and external stimuli.

Stimulation

The action of applying a stimulus to a bodily part to produce a response, often used in a variety of contexts from physical to mental stimulation.