@Fertfood has a current market value of $30 million and earns $2,700,000 annually, while Tools-4U has a market value of $5 million and annual earnings of $1 million per year. If the companies merge an additional cash flow of $136513 would result next year. The merged firm will have 5 million shares. The merged firm’s earnings in the first year will comprise the pre-merged earnings of each firm plus the additional cashflow mentioned above.