2. AB Ltd is considering the acquisition of PQ Ltd by making an offer of shares at five times of PQ's present earnings. What are the implications of this proposal? The relevant data are as follows: Earnings per share Market value per share (*) Profit after tax (lakh) P/E ratio (times) Total market value (lakh) AB Ltd PQ Ltd 10 200 2,000 201 10 100 2,000 10 40,000 20,000