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Brian Inc's shares are quoted at a market price of $4.20 giving a price-earnings ratio of 10. Brian has just made a takeover bid for Cedric Inc, at a price of $3.15 per share with the suggested purchase consideration being the exchange of 3 new shares in Brian for every 4 shares held in Cedric. The most recently quoted EPS of Cedric plc is 20c and its share's market price is currently is $2.60. Brian Inc could reduce the dilution in earnings per share after the takeover in all but one of the following ways. Which is the exception? A. Buy the shares in Cedric for cash, rather than by exchanging shares. B. Revalue Cedric's assets to a realistic current value. C. Achieve additional earnings growth as a consequence of the takeover. D. Sell off parts of Cedric's business after the takeover. |