Apex Corporation is considering the purchase of Pinnacle Company in a stock-for-stock exchange. Selected data on the two companies are shown in the following table:ApexPinnacle$845$1204036Sales (millions)Earnings after taxes (millions)Common shares outstanding (millions)Share priceEarnings per shareDividends per share.P/E ratioDividend payout ratioAssume that there are no synergistic benefits as the result of the merger. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places):a. 10 percent premium for Pinnacle$b. 20 percent premium for Pinnacle$c. 30 percent premium for Pinnacle$2,190$ 2807072$$$4.002.001850%$$3.001.201240%

First, we need to determine the value of Pinnacle using the formula below:When the company pays a…

Answered: a. 10 percent premium for Pinnacle $ b.…

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a. 10 percent premium for Pinnacle $ b. 20 percent premium for Pinnacle $ c. 30 percent premium for Pinnacle $

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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