APE company has 6.7 million shares of common stock outstanding. The current market price common stock is $76 per share rights-on. The company's net income this year is $23.50 million. A rights offering has been announced in which 670,000 new shares will be sold at $70.50 per share. The subscription price plus nine rights is needed to buy one of the new shares. What are the earnings per share and price-earnings ratio before the new shares are sold via the rights offering? Earnings per share Price-earnings ratio 2.What would the earnings per share be immediately after the rights offering? What would the price-earnings ratio be immediately after the rights offering? (Assume there is no change in the market value of the stock, except for the change when the stock begins trading ex-rights.)
APE company has 6.7 million shares of common stock outstanding. The current market price common stock is $76 per share rights-on. The company's net income this year is $23.50 million. A rights offering has been announced in which 670,000 new shares will be sold at $70.50 per share. The subscription price plus nine rights is needed to buy one of the new shares.
What are the earnings per share and price-earnings ratio before the new shares are sold via the rights offering?
Earnings per share
Price-earnings ratio
2.What would the earnings per share be immediately after the rights offering? What would the price-earnings ratio be immediately after the rights offering? (Assume there is no change in the market value of the stock, except for the change when the stock begins trading ex-rights.)
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