Earnings Per Share of the Purchasing Firm Usually Goes in Which

Multiple Choice

Earnings per share of the purchasing firm usually goes in which direction during a merger?

A) EPS will increase immediately if the purchased firm has a lower P/E ratio.
B) EPS will decrease immediately if the purchased firm has a lower P/E ratio.
C) EPS is not affected by the merger.
D) EPS will increase in the future if the purchased firm is less aggressive.