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If the acquiring firm has a higher P/E ratio than the acquired firm, the resulting earnings per share will be:

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If the acquiring firm has a higher P/E ratio than the acquired firm, the resulting earnings per share will be:

 Options:

A. the same as pre-merger
B. lower
C. higher
D. cannot be determined

 

The Correct Answer Is:

  • C. higher

 

Conclusion

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