The following are good reasons for mergers:
I. Surplus funds
II. Eliminating inefficiencies
III. Complementary resources
IV. Increasing earnings per share (EPS)

Question

Quizplus · Accepted Answer

Having surplus funds can be a good reason for mergers as it allows the merged company to have more resources for growth and investment. Eliminating inefficiencies can lead to cost savings which can improve profitability. Complementary resources can allow the merged company to expand its operations and offer a wider range of products or services. However, focusing solely on increasing earnings per share (EPS) may not always result in long-term benefits for the company and its stakeholders.

The Following Are Good Reasons for Mergers