If a Merger or Acquisition Is Not Immediately Accretive, Should

question 21

Multiple Choice

If a merger or acquisition is not immediately accretive, should the acquirer go through with the transaction? Why or why not?

• A)No, the transaction will dilute the EPS and destroy shareholder value
• B)Yes, accretion/dilution is not important
• C)It depends; expected synergies and growth prospects may make the deal accretive and therefore create shareholder value
• D)No, once a deal is dilutive it cannot become accretive

Understand the concepts of national debt and budget deficits/surpluses.

Analyze the impact of fiscal policies on the economy, including during recessions and periods of full employment.

Explain the role and effects of automatic stabilizers in the economy.

Compare and contrast the views of Keynesian and conservative economists on the crowding-out effect.

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