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?
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.
... Currently, the firm has a beta of 1.13 and a stock price of $28 a share. ... Currently, the firm has a beta of 1.13 and a stock price of $28 a share. ...
... The firm's income, assets, and stock price have been growing at an annual 15% rate and are expected to continue to grow at this rate for 3 more years. ...
Project 3 Google Stock Closing Prices. PROJECT 3 INSTRUCTIONS. ... Assume that the closing prices of the stock form a normally distributed data set. ...
... When the short sale is done correctly, the stock price will decline. ... The stock price declined in high volume to $60 per share in November 1966. ...
33 questions on Capital Structure, Market value of the firm, stock price, estimated cost of equity, dividends, bonds, working capital, etc: Please see attached ...
... The stock price had risen from its initial value of $10 to its current level of $25 per share. There were currently 5 million shares outstanding. ...
