Which of the following is not a potential benefit of a merger?
A) Greater access to financial markets,and thus,be in a better position to raise debt and equity capital.
B) Achieving risk reduction while perhaps maintaining the firm's rate of return.
C) Tax loss carry-forward might be available in a merger if one of the firms has previously sustained a tax loss.
D) Increased standard deviation of earnings per share.

Question

Quizplus · Accepted Answer

Increased standard deviation of earnings per share is not a potential benefit of a merger, as it indicates greater volatility and uncertainty in the earnings of the merged entity. The other options listed (greater access to financial markets, risk reduction, and potential tax benefits) are all potential benefits of a merger.

Which of the Following Is Not a Potential Benefit of a Merger