If the P/E Paid Is Less Than the P/E of the Acquiring

question 160

Multiple Choice

If the P/E paid 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:

Preconventional

A stage in moral development characterized by reasoning based on personal rewards and punishments.

Postconventional

A stage of moral development in which individuals make judgments based on universal principles and the rights of others rather than convention.

Moral Development

Refers to the processes through which individuals acquire and understand moral standards and behaviors.

Kohlberg

A psychologist known for his theory of moral development, which describes how moral reasoning matures through stages over a person's lifetime.