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ST Inc makes a bid to acquire all the share capital of WV Inc, paying for the acquisition by means of a share exchange. The shares of ST Inc are currently trading on a P/E of 12.5 and the shares of WV Inc are trading on a P/E ratio of 15. No savings or increase in combined sales are expected as a result of the takeover. Given no change in the annual profits after tax of either company, what will happen to the earnings per share of the combined ST group after the takeover? A. EPS will remain the same. B. EPS will go down. C. It is impossible to assess, without figures for earnings and numbers of shares. D. EPS will go up. |