BOOTSTRAPPING

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December 7, 2016 at 9:53 am #354946
Muslim Farooque
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Sir what is bootstrapping and how can it be used to value the company post acquisition?
December 7, 2016 at 2:09 pm #355019
John Moffat
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Bootstrapping is where the acquiring company has a higher PE ratio than the target company, but maintains its PE after the acquisition.

The valuation would be done the normal way with PE valuations – multiplying the new total earnings by the PE ratio.
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