[Dh2702]

I have a question honestly that really has been confusing me, so under this question, I’m just trying to understand why when trying to decide the post acquisition value of the new company to begin with, aren’t we supposed to take the combined earnings of both companies multiplied by a p/e ratio? In this question, I noticed that no P/E ratio was given for the new company, so in questions where no P/E ratios for new companies are given, does that mean I can just combine both companies market values per their share prices pre acquisitions plus synergies to find the answer? Will that be the case in any question then in which no P/e ratio for the new company is given?

[Author]

Posts