Purple Co$.$ would like to buy Blue Co$.$ for a $30\%$ control premium. Currently Purple Co$.$s stock price is $$28\mathrm{.}42,$ its EPS is $$2\mathrm{.}48$ and it has $103$mm shares outstanding. Currently Blue Co$.$s stock price is $$24\mathrm{.}59($before control premium$),$ its EPS is $$1\mathrm{.}78$ and it has $21\mathrm{.}5$mm shares outstanding. Purple Co$.$s cost of debt is $5\%$ and its tax rate is $40\%.$

$3.$ If Purple Co$.$ uses stock to acquire Blue Co$.$ what would Purple Co$.$s proforma EPS be$?$

A$)$ $$2\mathrm{.}31$

B$)$ $$2\mathrm{.}35$

C$)$ $$2\mathrm{.}42$

D$)$ $$2\mathrm{.}48$

$4.$ If Purple Co$.$ uses stock to acquire Blue Co$.$ what amount of pre$-$tax synergies are required for Purple Co$.$ to breakeven on an EPS basis?

A$)$ $$0$mm

B$)$ $$21\mathrm{.}7$mm

C$)$ $$30\mathrm{.}3$mm

D$)$ $$36\mathrm{.}2$mm

$5.$ If Purple Co$.$ uses debt to acquire Blue Co$.$ what would Purple Co$.$s proforma EPS be$?$

A$)$ $$2\mathrm{.}48$

B$)$ $$2\mathrm{.}52$

C$)$ $$2\mathrm{.}65$

D$)$ $$3\mathrm{.}78$

$6.$ What is the maximum price Purple Co$.$ can pay before the deal becomes dilutive if it acquires Blue Co$.$ with debt?

A$)$ $$35\mathrm{.}60$

B$)$ $$47\mathrm{.}36$

C$)$ $$59\mathrm{.}33$

D$)$ $$87\mathrm{.}07$