Question
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 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 | Pinnacle | |||||||
| Sales (millions) | $ | 910 | $ | 285 | ||||
| Earnings after taxes (millions) | $ | 120 | $ | 40 | ||||
| Common shares outstanding (millions) | 60 | 40 | ||||||
| Share price | 36 | 12 | ||||||
| Earnings per share | $ | 2.00 | $ | 1.00 | ||||
| Dividends per share | $ | 1.00 | $ | 0.40 | ||||
| P/E ratio | 18 | 12 | ||||||
| Dividend payout ratio | 50 | % | 40 | % | ||||
Assume that there are immediate synergistic benefits of $3 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places):
-
10 percent premium for Pinnacle
$
-
30 percent premium for Pinnacle
$
-
40 percent premium for Pinnacle
$
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Make Fpgas
Authors: David Romano
1st Edition
145718785X, 978-1457187858
