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Business, 09.04.2020 22:35 marvezunderwood

Louisiana Timber Company currently has 4 million shares of stock outstanding and will report earnings of $6.36 million in the current year. The company is considering the issuance of 2 million additional shares that will net $38 per share to the corporation.

a. What is the immediate dilution potential for this new stock issue? (Do not round intermediate calculations and round your answer to 2 decimal places.) $0.53 per share (correct)
b-1. Assume the Louisiana Timber Company can earn 9.00 percent on the proceeds of the stock issue in time to include it in the current year’s results. Calculate earnings per share.

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