The earnings per share of the merged firm are generally above the premerger earnings per share of one firm and below the premerger earnings per share of the other, after making the necessary adjustment for the ratio of exchange.

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This statement is generally true. Earnings per share (EPS) can be affected by the merger as the number of shares outstanding may change due to the merger. The ratio of exchange would adjust the EPS of both firms before the merger. After the merger, the EPS of the merged firm tends to be higher than one firm's premerger EPS and lower than the other firm's premerger EPS. However, this may not always be the case, as the EPS of the merged firm can also be lower than both firms' premerger EPS if the merger does not generate expected synergies.

The Earnings Per Share of the Merged Firm Are Generally