The Shareholders of Jolie Company Have Voted in Favor of a Buyout

question 73

Multiple Choice

The shareholders of Jolie Company have voted in favor of a buyout offer from Pitt Corporation.Information about each firm is given here: Jolie's shareholders will receive one share of Pitt stock for every three shares they hold in Jolie.Assume the NPV of the acquisition is zero.What will the post-merger PE ratio be for Pitt?

• A)8.4
• B)9.2
• C)9.8
• D)10.5
• E)11.2

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Definitions:

Parasympathetic Nervous

The part of the autonomic nervous system responsible for conserving energy and relaxing the body, counterbalancing the sympathetic nervous system.

Cognitive-Physiological Theory

A concept that links cognitive processes with bodily functions, explaining how thoughts and emotions influence physiological responses.

Schachter

Refers to Stanley Schachter, a psychologist known for his work on emotion, particularly the two-factor theory of emotion.

Physiological Arousal

pertains to the physical responses of the body, such as increased heart rate or adrenaline, often triggered by emotions, stress, or excitement.