Series 79 practice questioneasyAdvanced Financial Analysis
Which metric most directly measures whether a proposed acquisition will increase the acquirer's earnings per share?
- AInternal rate of return
- BReturn on equity
- CEnterprise value to sales multiple
- DAccretion/dilution analysis✓ Correct answer
Explanation
Why D — Accretion/dilution analysis
Accretion/dilution analysis shows the impact on EPS, helping determine if a deal is accretive or dilutive. Using other metrics misses the direct effect on shareholders’ earnings.
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