How would you answer this interview question?
Assuming an all cash offer and excluding the effects of foregone interest, would a company with a P/E multiple of 7x acquiring a company with a P/E multiple of 5x be? If so, why?
What if foregone interest on cash was included?
Also, what if it was an all-debt deal and interest on debt was excluded? What if it was an all-debt deal and interest on debt was included?