Tyson Iron Works is about to go public. It currently has aftertax earnings of $4,800,000, and 3,600,000 shares are owned by the present stockholders. The new public issue will represent 200,000 new shares. The new shares will be priced to the public at $20 per share with a 5 percent spread on the offering price. There will also be $220,000 in out-of-pocket costs to the corporation.
a. Compute the net proceeds to Tyson Iron Works. (Do not round intermediate calculations and round your answer to the nearest whole dollar.)
Spread ________%
b. Compute the earnings per share immediately before the stock issue. (Do not round intermediate calculations and round your answer to 2 decimal places.)
Spread ________%
c. Compute the earnings per share immediately after the stock issue. (Do not round intermediate calculations and round your answer to 2 decimal places.)
Net Amount to be received _________per share
