Myers Company Ltd. was formed 10 years ago by the issuance of 23,000 common shares to three shareholders. Four years later, the company went public and issued an additional 30,000 common shares. The management of Myers is considering a takeover in which Myers would purchase all of the outstanding common shares of Norris Inc. Two alternative proposals are being considered: PROPOSAL 1 Myers would offer to pay $413,100 cash for the Norris common shares. In addition, Myers would incur legal, appraisal, and finders' fees for a total cost of $5,100. PROPOSAL 2 Myers would issue 51,000 shares currently trading at $8.10 each for the Norris common shares. Other costs associated with the takeover would be as follows: Legal, appraisal, and finders' fees Costs of issuing shares $5,100 7,100 $12,200 Norris shareholders would be offered five seats on the 10-member board of directors of Myers, and the management of Norris would be absorbed into the surviving company. Balance sheet data for the two companies prior to the combination are as follows: Ryers Carrying Amount Norels Fair Value Carrying Amount $ 53,500 $ 53,500 62,450 57,200 111,110 135,220 Cash $ 561,000 Accounts receivable 168,200 375,120 426,000 251,505 toxipment (net) 79,945 18,705 16,945 Inventory Land buildings (net) 76,000 211,000 22,020 25,020