                   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                                           
