Alpine Industries has 10 million shares of stock outstanding and expects to report $35 million earnings this year.

Published by admin at August 21, 2023

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Alpine Industries has 10 million shares of stock outstanding and expects to report $35 million earnings this year. If it issues 2 million additional shares this year that will result in $4 million net earnings to the company, find (1) the earnings per share before the issuance of additional shares; (2) the earnings per share after the additional shares are issued; (3) any potential dilution of earnings per share.

Anderson Whitney has earnings of $4.5 million on 2.2 million shares outstanding. It is planning a public offering of 500,000 shares of which 200,000 will be new corporate shares and 300,000 will be issued to the founder and CEO as a secondary offering. The net price of the offering will be $22 and the corporate proceeds are expected to produce $2 million in corporate earnings. Find (1) the corporation’s earnings per share before the offering; (2) the corporation’s expected earnings per share after the offering.