When the ratio of exchange in a merger is equal to one and both the acquiring and the target companies have the same premerger earnings per share, the merged firm’s earnings per share will initially
A. decline.
B. remain constant.
C. increase.
D. drop to zero.
Answer:B
When the ratio of exchange in a merger is equal to one and both the acquiring and the target companies have the same premerger earnings per share, the merged firm’s earnings per share will initially
A. decline. B. remain constant. C. increase. D. drop to zero.