Firms that are acquired to take advantage of bootstrapping often have:
A)A lower price-earnings ratio than the acquirer
B)A higher price-earnings ratio than the acquirer
C)More outstanding shares than the acquirer
D)A higher market valuation than the acquirer

Question

Quizplus · Accepted Answer

Bootstrapping occurs when a firm with a higher price-earnings ratio acquires a firm with a lower price-earnings ratio to increase its own earnings per share.

Firms That Are Acquired to Take Advantage of Bootstrapping Often