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

question 46

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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