If an acquisition does not create value, and the market is "smart," Blank______.Multiple choice question.the PE ratio of the combined firm will be the same as the PE of the acquiring firmthe earnings per share of the combined firm will remain the same as the earnings per share of the acquiring firmthe PE ratio of the combined firm will be the same as the PE of the target firmthe PE ratio of the combined firm will adjust to something between the PE of the acquiring firm and the target

If an acquisition does not create value, then the Blank______.Multiple choice question.earnings per share may increase but the stock price of the acquiring firm may remain the same or declineprice per share of the acquiring firm should increase because of the growth of the firmprice per share of the acquiring firm should increase while the price-earnings ratio remains constantthe price-earnings ratio should remain constant regardless of any changes in the earnings per share

On average, mergers and acquisitions Blank______ shareholder value.Multiple choice question.take the place ofcreatestrengthendestroy

Which of the following statements is FALSE?a.The most common valuation multiple is the price-earnings (P/E) ratio.b.The intuition behind the use of the P/E ratio is that when you buy a stock, you are in a sense buying the rights to the firm's future earnings and differences in the scale of the firms' earnings are likely to persist.c.A firm's P/E ratio is equal to the share price divided by its earnings per share.d.None of them.e.You should be willing to pay proportionally more for a stock with lower current earnings.

Which of the following statements is incorrect?Group of answer choicesA bargain purchase gain arises when the purchase consideration is greater than the FVINA acquired.When a subsidiary has existing goodwill in their books at the date of acquisition, the amount of FVINA will decrease in the acquisition analysis.The Investment in subsidiary account is always eliminated on consolidation and this account will always be equal to zero for the group.If a company acquires shares in a subsidiary cum div, consolidation adjusting entries are required to eliminate dividend payable and dividend receivable up until the dividend is paid by the subsidiary.

Fill in the Blank QuestionFill in the blank question.When the sale of a firm's total output of a product in a purely competitive product market has no effect on the market price, this makes the firm a . (Enter one word for each blank)