Looking back at Tables 23.5 and 23.6, assume that Diversified Industries acquires High-Tech Products in a stock-for-stock

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Looking back at Tables 23.5 and 23.6, assume that Diversified Industries acquires High-Tech Products in a stock-for-stock transaction and no immediate synergistic benefits are expected. How long will it take the expected EPS of the combined companies to equal the expected EPS of Diversified without the merger if Diversified is expected to grow at an annual rate of 7 percent without the merger and the combined companies are expected to grow at 8 percent a year?

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Contemporary Financial Management

ISBN: 978-1337090582

14th edition

Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao

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