Use the corporate valuation model and forecasted financial information in Exhibit 10 to determine the share value of FVC without synergies. How does this compare to the current price? Assume the growth rate of cash flows after 2012 is 4.5%.

Exhibit 10 FLINDER VALVES AND CONTROLS INC. Forecast of Financial Statements for Flinders Control and Valve for Years Ended December 31, 2008-12 (dollars in thousands) Actual 2007 $49,364 37,044 12,320 2,936 228 9,612 4,037 $5.575 Sales Cost of goods sold Gross profit administrative Other income, net Income before taxes Taxes Net income 2008 $59,600 43.816 15,784 3,612 240 12,412 4.965 $7.447 Projected 2009 2010 $66,000 $73,200 48.750 54,104 17,250 19,096 4,124 4,564 288 13,390 14,820 5.356 5.928 $8.034 $8.892 2011 $81,200 59.958 21,242 5,052 320 16,510 6,604 $9.906 2012 $90,000 66.200 23,800 5,692 264 352 18,460 7.384 $11,076 Depreciation $1,508 $1,660 $1,828 $2,012 $2,212 $2,432 Net PPE Net Working capital $18,268 $16,840 $22,056 $20,331 $24,424 $22,515 $27,088 $24,971 $30,049 $27,700 $33,306 $30,702 Source: FVC Analysis Exhibit 10 FLINDER VALVES AND CONTROLS INC. Forecast of Financial Statements for Flinders Control and Valve for Years Ended December 31, 2008-12 (dollars in thousands) Actual 2007 $49,364 37,044 12,320 2,936 228 9,612 4,037 $5.575 Sales Cost of goods sold Gross profit administrative Other income, net Income before taxes Taxes Net income 2008 $59,600 43.816 15,784 3,612 240 12,412 4.965 $7.447 Projected 2009 2010 $66,000 $73,200 48.750 54,104 17,250 19,096 4,124 4,564 288 13,390 14,820 5.356 5.928 $8.034 $8.892 2011 $81,200 59.958 21,242 5,052 320 16,510 6,604 $9.906 2012 $90,000 66.200 23,800 5,692 264 352 18,460 7.384 $11,076 Depreciation $1,508 $1,660 $1,828 $2,012 $2,212 $2,432 Net PPE Net Working capital $18,268 $16,840 $22,056 $20,331 $24,424 $22,515 $27,088 $24,971 $30,049 $27,700 $33,306 $30,702 Source: FVC Analysis