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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 $1,230 $ 160 Pinnacle $215 $ 30 10 39 Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share P/E ratio Dividend payout ratio $ $ 40 76 4.00 2.00 19 50% $ $ 3.00 1.35 13 45% Assume that there are immediate synergistic benefits of $6 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to

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 $1,230 $ 160 Pinnacle $215 $ 30 10 39 Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share P/E ratio Dividend payout ratio $ $ 40 76 4.00 2.00 19 50% $ $ 3.00 1.35 13 45% Assume that there are immediate synergistic benefits of $6 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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eBook 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: BE 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. 30 percent premium for Pinnacle Apex $1,230 $160 $ c. 40 percent premium for Pinnacle $ $ $ 40 76 4.00 2.00 19 50% Assume that there are immediate synergistic benefits of $6 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 Pinnacle $215 $ 30 10 39 $3.00 $ 1.35 13 45%
Transcribed Image Text:eBook 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: BE 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. 30 percent premium for Pinnacle Apex $1,230 $160 $ c. 40 percent premium for Pinnacle $ $ $ 40 76 4.00 2.00 19 50% Assume that there are immediate synergistic benefits of $6 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 Pinnacle $215 $ 30 10 39 $3.00 $ 1.35 13 45%
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