Example:
Company A has 5M stocks @ 1$ each, and revenue of 5M (PE = 1)
Company B is private, but has a revenue also of 5M.
If Company A buys company B (for an unknown price). What should the theoretical price of Company A become?
Their revenue is now 10M combined, so should the price of Company A's stock double? (since investors cannot buy Company B stock?)
Submitted September 06, 2017 at 12:40AM by Anon89m http://ift.tt/2j2msLw
