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: Pinnacle Apex $1,310 $635 $ 80 Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share P/E ratio Dividend payout ratio $ 180 60 57 $ $ 3.00 1.65 19 55% 40 26 $ 2.00 $ 1.00 13 50% Assume that there are immediate synergistic benefits of $2 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places):
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: Pinnacle Apex $1,310 $635 $ 80 Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share P/E ratio Dividend payout ratio $ 180 60 57 $ $ 3.00 1.65 19 55% 40 26 $ 2.00 $ 1.00 13 50% Assume that there are immediate synergistic benefits of $2 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places):
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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Transcribed Image Text: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:
Apex
$1,310
Pinnacle
$635
$ 180
$80
60
40
57
26
$2.00
$ 1.00
13
50%
Sales (millions)
Earnings after taxes (millions)
Common shares outstanding (millions)
Share price
Earnings per share
Dividends per share
P/E ratio
Dividend payout ratio
$
b. 20 percent premium for Pinnacle
$
c. 30 percent premium for Pinnacle
$
$
Assume that there are immediate synergistic benefits of $2 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places):
a. 10 percent premium for Pinnacle
$
3.00
1.65
19
55%
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