If the P/E paid is less than the P/E of the acquiring company, the effect on the earnings per share of the acquired company will be

Question

Quizplus · Accepted Answer

The P/E ratio is a measure of how much investors are willing to pay for each dollar of earnings. If the P/E paid is less than the P/E of the acquiring company, it means that investors are paying less for each dollar of earnings of the acquired company. This will result in a lower earnings per share for the acquired company.

If the P/E Paid Is Less Than the P/E of the Acquiring