Pebble beach country club currently has four million shares, Ask an Expert

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Pebble Beach Country Club currently has 4 million shares of stock oustanding and will report earnings of $7 million in the current year. The company is considering the issuance of 500,00 additional shares that will net $35.00 per share to the corporation.

a. What is the immediate dilution potential for the new stock issue?

b. Assume that they can earn 9 percent on the proceeds of the stock issue in time to include it in the current year's results. Should the new issue be undertaken based on earnings per share?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9224736

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