The Tims Corporation expects earnings of $8,000,000 in the current year on 6,000,000 shares of common stock. The company is considering the effects on expected earnings of issuing an additional 2,000,000 shares of common stock.
(a) What will be the initial dilution in earnings per share if the new stock is issued?
(b) If the firm sells the sock for a net price of $23 per share and is able to earn 60% after tax on the proceeds before the end of the year, what will be the earnings per share?
Solution Preview
The Tims Corporation expects earnings of $8,000,000 in the current year on 6,000,000 shares of common stock. The company is considering the effects on expected earnings of issuing an additional 2,000,000 shares of common stock.
(a) What will be the initial dilution in earnings per share if the new stock is issued?
You can find the initial earnings per ...
Solution Summary
This solution explains:
1) How to calculate the dilution affect on a stock based on new stock being issued.
2) How to calculate earnings per share of a stock.
Fit autoregressive model to GE stock price under different order. Problem 16.30 GE.xls Autoregression. ... So the equation is stock price=2.975+0.925(Lag1). ...
Payout stock price, calculate ratios, growth rate, merger facts. 8. Cash Dividends. The stock of Payout Corp. ... a. What price is Payout stock selling for today? ...
1. "You say stock price equals the present value of future dividends? That's crazy! ... "You say stock price equals the present value of future dividends? ...
... You will use both the CAPM (Capital Asset Pricing Model) and the Constant Growth Model (CGM) to arrive at IBM's stock price. ...Stock price = Industry PE x EPS. ...
... on January 1, 2003 when it acquired $60,000 cash from the issue of common stock. During 2003 the company purchased and used raw materials that cost $16,000 cash ...
Analysis of Stock and Index Prices for Ross Stores. ... TOTAL RISK Convert your stock price and index data to return series if you have not already done so. ...
... a. If the underlying stock does not pay a dividend, it makes good economic sense to exercise a call option as soon as the stock's price exceeds the strike ...
