If the acquiring firm's P/E ratio is greater than the P/E of the acquired firm, the surviving firm will automatically get an increase in
E.P.S.

Question

Quizplus · Accepted Answer

This is because the acquiring firm's higher P/E ratio reflects a higher market valuation for their earnings per share. After the merger or acquisition, the acquired firm's earnings will also contribute to the surviving firm's earnings per share, leading to an overall increase in EPS.

If the Acquiring Firm's P/E Ratio Is Greater Than the P/E