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Mergers and acquisitions often report fixed purchase prices, but this isn't always the case. Sometimes, deals include an "earn-out," which is a contingent payout. An earn-out allows the sellers—shareholders of the target company, here Company B—to receive extra funds if the company meets specific financial targets over the next few years. For example, if a buyer offers $10 million upfront for Company B but includes an earn-out clause, they might agree to pay an additional $500,000 if Company B's net income reaches $2 million in the following year. This means the total payment could exceed the initial fixed price depending on performance.