52 The Board of Directors of MAT Corporation is planning to make a big acquisition in the next fiscal year. The company hired a merger and acquisition (M&A) consultant to conduct a financial feasibility study using what-if analysis. The consultant and the company’s financial analyst have developed the following data table for the four top target companies from the pre-final list. Item Target Co. 1 Target Co. 2 Target Co. 3 Target Co. 4 EPS $2 $10 $5 $3 Mkt Price $40 $100 $75 $63 Based on the data table, which of the following target companies is the most expensive company to acquire using the price/earnings (P/E) ratio as the criteria? Group of answer choices Target Co. 4 Target Co. 2 Target Co. 1 Target Co. 3
52 The Board of Directors of MAT Corporation is planning to make a big acquisition in the next fiscal year. The company hired a merger and acquisition (M&A) consultant to conduct a financial feasibility study using what-if analysis. The consultant and the company’s financial analyst have developed the following data table for the four top target companies from the pre-final list. Item Target Co. 1 Target Co. 2 Target Co. 3 Target Co. 4 EPS $2 $10 $5 $3 Mkt Price $40 $100 $75 $63 Based on the data table, which of the following target companies is the most expensive company to acquire using the price/earnings (P/E) ratio as the criteria? Group of answer choices Target Co. 4 Target Co. 2 Target Co. 1 Target Co. 3
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 7P
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Question
52
The Board of Directors of MAT Corporation is planning to make a big acquisition in the next fiscal year. The company hired a merger and acquisition (M&A) consultant to conduct a financial feasibility study using what-if analysis. The consultant and the company’s financial analyst have developed the following data table for the four top target companies from the pre-final list.
|
Item |
Target Co. 1 |
Target Co. 2 |
Target Co. 3 |
Target Co. 4 |
|
EPS |
$2 |
$10 |
$5 |
$3 |
|
Mkt Price |
$40 |
$100 |
$75 |
$63 |
Based on the data table, which of the following target companies is the most expensive company to acquire using the price/earnings (P/E) ratio as the criteria?
Group of answer choices
Target Co. 4
Target Co. 2
Target Co. 1
Target Co. 3
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