CIMA Financial Strategy F3 Question # 71 Topic 8 Discussion

CIMA Financial Strategy F3 Question # 71 Topic 8 Discussion

F3 Exam Topic 8 Question 71 Discussion:
Question #: 71
Topic #: 8

Company A plans to acquire Company B in a 1-for-1 share exchange.

Pre-acquisition information is as follows:

 F3 Question 71

 

Post-acquisition information is as follows:

    Annual earnings are expected to increase by $4 million.

    The P/E multiple of the combined company is expected to be 12 times.

 

If the acquisition proceeds, what is the expected percentage increase in the post acquisition share price of Company A?  


A.

50%


B.

 8%


C.

6%


D.

0%


Get Premium F3 Questions

Contribute your Thoughts:


Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.