Assume the average borrowing rate for Australian companies is 6%, the average tax rate is 30%, and the average P/E ratio
Posted: Wed Jul 06, 2022 6:44 pm
Assume the average borrowing rate for Australian companies is6%, the average tax rate is 30%, and the average P/E ratio is15x. Referencing the cost of capital, explain why on average,on an after-tax basis, debt financed cash offers are more likely tobe accretive to the bidder than stock offers.