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

Question

Quizplus · Accepted Answer

If the total market value of the merged firms remains the same, it suggests that investors do not see any potential benefits or synergies resulting from the merger. This could be an indication that the merged firms are not expected to create value greater than the sum of their individual values, and therefore, the merger is not expected to result in any significant financial advantages.

One Indication That Investors Expect No Synergy from a Merger