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Exam F3 All Questions
Exam F3 All Questions

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CIMA Strategic F3 Question # 103 Topic 11 Discussion

F3 Exam Topic 11 Question 103 Discussion:
Question #: 103
Topic #: 11

Company A plans to acquire Company B in a 1-for-1 share exchange.

Pre-acquisition information is as follows:

 F3 Question 103

 

Post-acquisition information is as follows:

    Annual earnings are expected to increase by $4 million.

    The P/E multiple of the combined company is expected to be 12 times.

 

If the acquisition proceeds, what is the expected percentage increase in the post acquisition share price of Company A?  


A.

50%


B.

 8%


C.

6%


D.

0%


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