Question $24$ of $34$

One month after this deal is announced, the market becomes very skeptical of the "potential

synergies." Company A$\text{'}$s share price declines so that it reflects an expectation that Company B

is worth only its pre$-$deal$-$announcement Equity Value of $$80.$

For your reference, the Excel setup from the previous question is shown below:

In this scenario, which of the following will NOT happen? A$)$ The combined equity value and combined enterprise value will both decrease by $$20.$ B$)$ The equity purchase price will stay the same, so company A will use the same dollar amounts of Debt and stock to fund the deal C$)$ Since company A will use the same dollar amounts of debt and stock to acquire company B$,$ the EPS accretion$/$dilution will reamain the same.

D$)$ The combined Net income and EBITDA will be the same because each company's seperate Net income and EBITDA will be the same, and the interest expense on the transaction debt will not change.