标题: bootstrapping and its effect on EPS [打印本页] 作者: grharmeyer 时间: 2011-7-11 20:07 标题: bootstrapping and its effect on EPS
Why does bootstrapping increase current EPS and decrease future EPS?
Thanks.作者: mengxu 时间: 2011-7-11 20:07
Bootstrapping doe not increase current EPS unless the P/E of the target is lower than the acquirer's.作者: cv4cfa 时间: 2011-7-11 20:07
It's basically accounting trickery. The acquiring company expects to keep the same P/E post merger, so if they buy a company with a lower P/E, they are in essence buying their earnings at a discount. However the market recognizes this, so the acquirers price will adjust to account for it.
