One indication that investors expect no synergy from a merger would be that:
A) total market value of the merged firms does not change.
B) the P/E ratio of the merged firms changes.
C) the acquiring firm financed the merger with cash.
D) the merged firms are from different industries.

Question

Quizplus · Accepted Answer

If the total market value (or market capitalization) of the merged firms does not change, it suggests that investors do not see any potential benefits or synergies that would result from the merger. This indicates that the merger may not create value for the shareholders of either company.

One Indication That Investors Expect No Synergy from a Merger