Potential challenge or downside to merger

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Reference no: EM131556665

1. Which of the following is NOT a potential challenge or downside to a merger?

Anti-trust laws

Dilution

Firm valuation

Synergy

2. A firm increases its debt-equity ratio from 1.20 to 1.50. If its return on assets (ROA) remains at 7%, then the firm's

debt ratio must increase by 30%.

return on equity (ROE) must decline by 0.3%.

return on equity (ROE) must increase by 2.1%.

profit margin must increase by 0.3%.

Reference no: EM131556665

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