The Following Data on a Merger Is Given: Firm

question 72

Multiple Choice

The following data on a merger is given: Firm A has proposed to acquire Firm B at a price of $20 per share for Firm B's stock. Calculate the post merger P/E ratio assuming cash is used in the acquisition.

• A) 12.75
• B) 6.25
• C) 13.75
• D) None of the above

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Definitions:

Dikaryotic

Describes cells or organisms having two distinct nuclei within a single cell, typical in some fungi during certain life stages.

Composite Organism

An entity consisting of two or more different species forming a symbiotic relationship, appearing or functioning as a single biological unit.

Lichen

Composite organism consisting of a fungus and green algae or cyanobacteria.

Autotroph

An organism capable of synthesizing its own food from inorganic substances using light or chemical energy, such as plants and some bacteria.