23 Which one of the following statements is correct a An inc

23. Which one of the following statements is correct? a. An increase in the earnings per share as a result of an acquisition wil increase the price per share of the acquiring firm. of an acquisition which fails to create value. c. If firm A acquires firm B then the number of shares in AB will equal the number of shares of A plus the number of shares of B d. If no value is created when firm A acquires firm B, then the total value of AB will equal the value of A plus the value of B. e. Diversification is one of the greatest benefits derived from an acquisition. 24. Which one of the following statements is correct? a. A spin- off frequently follows an equity carve-out. b. A split-up frequently follows a spin-off. c. An equity carve-out is a specific type of acquisition. d. A spin-off involves an initial public offering. e. A divestiture means that the original firm ceases to exist.

Solution

23 E. By acquisition firm is able to produce new products reducing its dependence on one product

24, A is true.