Selecting the appropriate financing structure for the combined firms requires consideration of which of the following:
A) The impact on the combined firm's EPS
B) Potential violation of loan covenants
C) The extent to which the primary needs of both the buyer's and seller's shareholders are satisfied.
D) A and B only
E) A, B, and C

Question

Quizplus · Accepted Answer

Selecting the appropriate financing structure for the combined firms requires consideration of all three factors - the impact on the combined firm's EPS, potential violation of loan covenants, and the extent to which the primary needs of both the buyer's and seller's shareholders are satisfied. Therefore, option E, which includes all three factors, is the best choice.

Selecting the Appropriate Financing Structure for the Combined Firms Requires