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A Firm with a P/E Ratio of 15 Wants to Take

question 48

Multiple Choice

A firm with a P/E ratio of 15 wants to take over a firm that is 1/3 its size (in market capitalization) that has a P/E ratio of 20. What would be the P/E ratio of the merged firm?

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Definitions:

Data

Quantitative or qualitative information collected for reference or analysis.

Standard Deviation

A parameter that indicates the level of dispersion or variability within a collection of data points.

Data

Factual information, especially measurements or research results, used as a basis for reasoning, discussion, or calculation.

Standard Deviation

An indicator that quantifies the extent of spread or deviation of a collection of values from their average.

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