1. If a firm wishes to achieve immediate appreciation in earnings per share as a result of a merger, how can this be best accomplished in terms of exchange variables?

2. What is a possible drawback to this approach in terms of long-range considerations?

3. It is possible for the post merger P/E ratio to move in a direction opposite to that of the immediate postmerger earnings per share. Explain why this could happen.

4. How is goodwill now treated in a merger?

5. Suggest some ways in which firms have tried to avoid being part of a target takeover.

6. What is a typical merger premium paid in a merger or acquisition? What effect does this premium have on the market value of the merger candidate, and when is most of this movement likely to take place?