• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

PE ratio

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › PE ratio

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • February 27, 2019 at 3:32 pm #506710
    gaya3790
    Participant
    • Topics: 12
    • Replies: 12
    • ☆

    The shares of Fencer plc are currently valued on a P/E ratio of 8. The company is considering a takeover bid for Seed Limited, but the shareholders of Seed have indicated that they would not accept an offer unless it values their shares on a P/E multiple of at least 10.
    Which THREE of the following are reasons which might justify an offer by Fencer plc for the shares of Seed on a higher P/E multiple?

    A Fencer has better growth prospects than Seed
    B Seed has better-quality assets than Fencer
    C Seed has a higher gearing ratio than Fencer
    D Seed is in a different country from Fencer, where average P/E ratios are higher
    sir i am getting this question, ans:B and D

    February 27, 2019 at 4:05 pm #506726
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    Surely you must have an answer in the same book in which you found the question!!

    Your answer seems OK to me 🙂

    February 28, 2019 at 3:26 am #506785
    gaya3790
    Participant
    • Topics: 12
    • Replies: 12
    • ☆

    But sir I didn’t understand what they are asking, that’s confusing me

    February 28, 2019 at 9:46 am #506815
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    They are asking why Fencer might be prepared to at least 10 times the EPS of Seed for the shares in Seed.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • Annabelayinloya on IFRS 16 Identifying a lease – ACCA (SBR) lectures
  • Ojoggo on The Statement of Financial Position and Income Statement (part a) – ACCA Financial Accounting (FA) lectures
  • hhys on PM Chapter 4 Questions Environmental Management Accounting
  • singhjyoti on Conceptual Framework – ACCA SBR lecture
  • John Moffat on Time Series Analysis – ACCA Management Accounting (MA)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in