1. What are the earnings per share? 
January 12, 2018
Based on the judge’s reaction to the question, identify the legal rule that is in force in the jurisdiction where the trial took place.
January 12, 2018

Compute the net proceeds to Houston Corp.

The Houston Corp. needs to raise money for an addition to its plant. It will issue 300,000 shares of new common stock. The new shares will be priced at $60 per share with an 8.5% spread on the offer price. Registration costs will be $150,000. Presently Houston Corp has earnings of $3 million and 750,000 shares outstanding. A). Compute the potential dilution from this new stock issue. B). Compute the net proceeds to Houston Corp. C). What rate of return must be earned on the net proceeds so that no dilution of earnings per share occurs?

 

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