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 $315 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. 40 percent premium for Pinnacle Apex $750 $100 $ 50 36 $ 2.00 $0.80 18 40% $ 40 40 Assume that there are immediate synergistic benefits of $7 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 14 $1.00 $ 0.30 14 30%
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 $315 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. 40 percent premium for Pinnacle Apex $750 $100 $ 50 36 $ 2.00 $0.80 18 40% $ 40 40 Assume that there are immediate synergistic benefits of $7 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 14 $1.00 $ 0.30 14 30%
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:
Pinnacle
$315
$ 40
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
Apex
$750
$100
$
c. 40 percent premium for Pinnacle
$
50
36
$2.00
$0.80
18
40%
Assume that there are immediate synergistic benefits of $7 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
40
14
$1.00
$ 0.30
14
30%
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