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 earnings per share.

Question

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When the acquiring firm's P/E ratio is greater than the P/E of the acquired firm, it means that the acquiring firm is willing to pay more for each dollar of earnings of the acquired firm. This implies that the earnings of the acquired firm will contribute positively to the earnings per share of the surviving firm, leading to an increase in earnings per share.

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