Series 79 practice questioneasyAdvanced Financial Analysis
A target’s pro forma income statement after an acquisition should reflect which of the following?
- AStandalone target results only
- BAcquirer’s prior year results only
- CHistorical synergies only
- DCombined operating results plus deal adjustments✓ Correct answer
Explanation
Why D — Combined operating results plus deal adjustments
A pro forma income statement must show the combined company's results, including deal-specific adjustments such as synergies or new interest expenses. Failing to include these could misrepresent the transaction’s true impact.
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