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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Nente Co (June 2012) Continued
Hi John
Please explain why P/E ratio was used even though I could have added the individual market values plus synergies to arrive at the combined company’s market value. Thank you
Because the fact that the question says they will be able to operate at a higher PE will increase the market value (over and above the pure synergy benefits).
Thanks a lot John
You are welcome 🙂