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The shareholders of Jolie Company have voted in favor of a buyout offer from Pitt Corporation. Information about each firm is given here: Jolie Pitt

The shareholders of Jolie Company have voted in favor of a buyout offer from Pitt Corporation. Information about each firm is given here:

Jolie Pitt
Priceearnings ratio 9.9 29
Shares outstanding 78,000 290,000
Earnings $ 260,000 $ 990,000

Jolie's shareholders will receive one share of Pitt stock for every three shares they hold in Jolie.

a-1

What will the EPS of Pitt be after the merger? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)

EPS $

a-2

What will the PE ratio be if the NPV of the acquisition is zero? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

PE

b.

What must Pitt feel is the value of the synergy between these two firms?

Synergy value $

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