Asked by
Jillian Wilder
on Nov 07, 2024Verified
Which of the following is a correct statement?
A) EPS growth cannot occur as the result of an acquisition.
B) EPS growth cannot occur from an acquisition unless it creates no additional value.
C) Stockholders can achieve diversification on their own.
D) Diversification is usually beneficial in a merger because it reduces systematic risk.
E) Diversification, by itself, is one reason that value may be created in a merger.
Diversification
The strategy of spreading investments across various asset classes or sectors to reduce risk.
Merger
A strategic business action where two entities consolidate their assets, operations, and management with the aim of fostering growth or competitive advantage.
- Assess the importance of diversification in mergers and acquisitions.
Verified Answer
DH
Learning Objectives
- Assess the importance of diversification in mergers and acquisitions.
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