Mock Examz MCQ's

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August 26, 2015 at 4:03 pm #268642
Mujtaba
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Apple plc is thinking of aquiring orange an unquoted building company.orange currently paying a dividend of $.20 per share and has a dividend cover of 3.2.Apple has found that quoted building companies have an average P/E ratio of 9.
which of the following would be the most sensible offer per share that Apple should make to Orange based on the above information?

Please show working. Thanks
August 27, 2015 at 8:25 am #268735
John Moffat
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EPS of Orange = 3.2 x $0.20 = $0.64

Market value of Orange = 9 x $0.64 = $5.76
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