                   DILUTION ANALYSIS
WHEN TWO PUBLICLY TRADED COMPANIES DECIDE TO MERGE VIA USE OF
AN EXCHANGE OF STOCK, THE ANALYSIS IS DOMINATED BY THE EXCHANGE
RATIO(I.E. # OF SHARES THE SURVIVING COMPANY OFFERS FOR EACH
SHARE OF THE ACQUIRED COMPANY), THE PRICE-EARNINGS RATIOS OF
THE SURVIVING FIRM, AND GENERAL CONDITIONS IN THE STOCK MARKET.
IN GENERAL WE DO NOT WANT EARNINGS PER SHARE FOR THE ACQUIRING
TO DECREASE. IF A DECREASE OCCURS THEN DILUTION OCCURS.
IF THE P-E RATIO FOR THE ACQUIRING FIRM REMAINS AS BEFORE THE
MERGER THEN DILUTION MEANS A LOWER PER SHARE STOCK PRICE.
IN THIS PROGRAM WE INPUT FOR EACH OF THE TWO COMPANIES THE
FOLLOWING: EARNINGS AFTER TAXES, SHARES OUTSTANDING,ERS, SHARE
PRICE AT TIME OF EXCHANGE. WE ALSO INPUT THE EXCHANGE RATIO.
OUTPUT CONSISTS OF THE NUMBER OF NEW SHARES ISSUED, EARNINGS
AFTER TAXES AND EARNINGS PER SHARE FOR THE SURVIVING FIRM.
PRESS ENTER TO BEGIN? 
ANSWER THE FOLLOWING FOR THE ACQUIRING FIRM

EARNINGS AFTER TAXES     ? 123456789
SHARES OUTSTANDING       ? 987654
PRICE AT TIME OF EXCHANGE ? 345

ANSWER THE FOLLOWING FOR THE ACQUIRED FIRM

EARNINGS AFTER TAXES     ? 678234
SHARES OUTSTANDING       ? 842741
PRICE AT TIME OF EXCHANGE ? 65

INPUT EXCHANGE RATIO ? 7.75
           ACQUIRING(BEFORE)  ACQUIRED       ACQUIRING(AFTER)

EAT    123456789.00      678234.00     124135023.00
SH. OUTST.     987654.00      842741.00     7518896.75
ERS        125.00           0.80          16.51
P-E RATIO          2.76          80.77

EXCHANGE RATIO IS  7.75  ACQUIRING FOR EACH 1 ACQUIRED.

ASSUMING NEW P-E RATIO WILL BE BETWEEN  2.76 AND 80.7659 
NEW PER SHARE PRICE WILL BE BETWEEN  45.5669  AND
 1333.42 

PRESS ENTER FOR MORE COMPUTATIONS? -1
