Stock Acquisition

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					                         EFFECT OF ACQUISITION INVOLVING STOCK EXCHANGE
                         Takeover                   Target
                        Company A                 Company B
Earnings Available
                         $500,000    Enter Data     $100,000
For Common Stock
Number of Common
                         125,000     Enter Data      20,000
Shares Outstanding
 Market Price Per
                          $80.00     Enter Data      $75.00
     Share
Earnings Per Share        $4.00                      $5.00
Price/Earnings Ratio
                           20.0                       15.0
       (P/E)
 Assumed Rate of
                          3.00%      Enter Data      7.00%
 Earnings Growth

Assumed Stock Price                               Excess Value
Premium Paid By A       Enter Data    46.67%      Over Existing
     to B (%)                                     B Share Price


 Assumed Ratio of
                                       1.375
Exchange (e.g., 1.35)

Assumed P/E Ratio
                        Enter Data     21.00
   of New Firm

     Effects of
 Combination of 2
  Firms - EPS No                       $4.14
Change in Combined
 Number of Shares

                                                                                                         Total    Total
 Assumed Ratio of                                New Equiv-
                        New EPS A                                                           Total     Number of Number
     Exchange                     Stock Price of alent EPS B      Earnings    Earnings
                          Share-                                                          Earnings     Shares A of Shares
Number of A Shares                  New Firm        Share-        From A      From B
                         holders                                                          New Firm      Share-   B Share-
 For Each B Share                                   holders
                                                                                                        holders  holders
       1.225              $4.16       $87.37         $5.72         $515,000    $107,000    $622,000      125,000    24,500
       1.275              $4.13       $86.79         $5.68         $515,000    $107,000    $622,000      125,000    25,500
       1.325              $4.11       $86.22         $5.65         $515,000    $107,000    $622,000      125,000    26,500
       1.375              $4.08       $85.65         $5.61         $515,000    $107,000    $622,000      125,000    27,500
       1.425              $4.05       $85.09         $5.57         $515,000    $107,000    $622,000      125,000    28,500
       1.475              $4.03       $84.54         $5.54         $515,000    $107,000    $622,000      125,000    29,500
       1.525              $4.00       $84.00         $5.50         $515,000    $107,000    $622,000      125,000    30,500
       1.575              $3.97       $83.46         $5.46         $515,000    $107,000    $622,000      125,000    31,500
PERFORMANCE OF NEW FIRM IN FUTURE YEARS

                    YEAR +1    YEAR +2    YEAR +3    YEAR +4    YEAR +5
 New Firm's Total
                    $622,000   $644,940   $668,868   $693,834   $719,892
    Earnings
                                                                                         Change
 New Firm's Stock
                     $85.65     $88.81     $92.11     $95.54     $99.13    Initial EPS   After 5
      Price
                                                                                          Years
 EPS Former A
                     $4.08      $4.23      $4.39      $4.55      $4.72       $4.00        18%
  Shareholders
 EPS Equivalent
   Former B          $5.61      $5.82      $6.03      $6.26      $6.49       $5.00        30%
  Shareholders

				
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