Explanation

Since the question states that the fair takeover value is based on comparable transaction analysis using the mean valuation ratio, but does not provide the actual P/E ratio multiple, we need to work backwards from the options.

Given:

• EPS = $6.50
• Options: $14, $50, $64

To find the implied P/E ratio for each option:

• $14 / $6.50 = 2.15x P/E (too low for most companies)
• $50 / $6.50 = 7.69x P/E (reasonable but somewhat low)
• $64 / $6.50 = 9.85x P/E (most reasonable for a takeover scenario)

In comparable transaction analysis for takeovers, P/E ratios typically range from 8-12x or higher, depending on the industry and growth prospects. A P/E ratio around 10x is quite common in acquisition scenarios, making $64 the most reasonable fair takeover value.

Answer: C