If an Acquisition Does Not Create Value, Then The

question 38

Multiple Choice

If an acquisition does not create value, then the:

• A)earnings per share of the acquiring firm must be the same both before and after the acquisition.
• B)earnings per share can change but the stock price of the acquiring firm should remain constant.
• C)price per share of the acquiring firm should increase because of the growth of the firm.
• D)earnings per share will most likely increase while the price-earnings ratio remains constant.
• E)price-earnings ratio should remain constant regardless of any changes in the earnings per share.

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Definitions:

Warning Coloration

Bright and distinctive patterns or colors on animals that serve to warn predators of their toxicity or unpalatability.

Ecological Niche

The role and position a species has in its environment; how it meets its needs for food and shelter, how it survives, and how it reproduces.

Density-dependent Factor

A factor whose effects on the size or growth of a population vary with the population density.

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An infectious disease caused by the bacterium Yersinia pestis, characterized by swollen lymph nodes, fever, and skin lesions.