An Acquiring Firm Has a Value of $500 Million and a P/E

question 64

Essay

An acquiring firm has a value of $500 million and a P/E ratio of 15.The target company has a value of $200 million and a P/E ratio if 10.It is expected that there will be $8 million gain from the merger.Given this information, determine the P/E of the merged firm and whether the P/E.

---

Definitions:

Affection

A feeling of fondness or liking, often expressed through physical or emotional closeness.

Carol Gilligan

An American feminist, ethicist, and psychologist best known for her work on ethical community and ethical relationships, and certain subject-object problems in ethics.

Kohlberg's Theory

A theory of moral development proposed by Lawrence Kohlberg, suggesting that people progress through a series of stages of moral reasoning.

Flawed

Having imperfections, defects, or shortcomings.