Question

A firm reports a net margin of 5.00%. The firm has 1,656,320.00 million shares outstanding. The...

A firm reports a net margin of 5.00%. The firm has 1,656,320.00 million shares outstanding. The firm has invested in a new product that will increase sales by $4,290,600.00 million this year.

a. What will be the increase in earnings this year if the sales increase occurs?

b. What will be the increase in earnings per share?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Net margin = 5.00%

Shares outstanding = 1,656,320.00 million

Increase in sales = $4,290,600.00 million

a. What will be the increase in earnings this year if the sales increase occurs?

Answer = If sales increase then increase in earnings = $4,290,600.00 million * 5%

= 214,530.00 million

b. What will be the increase in earnings per share?

Answer = Earnings per share = Earnings / Number of shares outstanding

Increase in earnings per share = Increase in earnings / Number of shares outstanding

= 214,530.00 million/ 1,656,320.00 million

= 0.1295 per share

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A firm reports $40,000,000 in sales for 2019. The firm has a net profit margin of...
A firm reports $40,000,000 in sales for 2019. The firm has a net profit margin of 5% and 4,000,000 share outstanding. If the firm has a dividend payout ratio of 20%, what is the dividends per share for the firm? Question 2 options: $0.10 $0.05 $0.15 $0.25 $0.20
Zip Corporation has 3 million shares of outstanding common stock and total earnings of $15,000,000. The...
Zip Corporation has 3 million shares of outstanding common stock and total earnings of $15,000,000. The corporation is considering issuing 1 million more shares of common stock. What will be the immediate dilution in earning per share (EPS)? If the new shares will be sold at $20 per share and the proceeds from the sale can be invested at 10%, will there still be dilution? Based on the new EPS, should the new shares of common stock be issued?
Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net...
Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net income (exclusive of any investment income) of $616,000. Primus has 50,000 shares of common stock outstanding. Sonston reports net income of $216,000 for the period with 40,000 shares of common stock outstanding. Sonston also has 5,000 stock warrants outstanding that allow the holder to acquire shares at $11.00 per share. The value of this stock was $22 per share throughout the year. Primus owns...
Murray Company reports net income of $893,000 for the year. It has no preferred stock, and...
Murray Company reports net income of $893,000 for the year. It has no preferred stock, and its weighted-average common shares outstanding is 380,000 shares.    Compute its basic earnings per share. Murray Company reports net income of $893,000 for the year. It has no preferred stock, and its weighted-average common shares outstanding is 380,000 shares.    Compute its basic earnings per share. Basic Earnings Per Share Choose Numerator: / Choose Denominator: = Basic EPS – / = Basic EPS –...
Louisiana Timber Company currently has 6 million shares of stock outstanding and will report earnings of...
Louisiana Timber Company currently has 6 million shares of stock outstanding and will report earnings of $6.72 million in the current year. The company is considering the issuance of 1 million additional shares that will net $40 per share to the corporation. a. What is the immediate dilution potential for this new stock issue? b.Assume the Louisiana Timber Company can earn 12.70 percent on the proceeds of the stock issue in time to include them in the current year Should...
2. Anderson Whitney has earnings of $4.5 million on 2.2 million shares outstanding. It is planning...
2. Anderson Whitney has earnings of $4.5 million on 2.2 million shares outstanding. It is planning a public offering of 500,000 shares of which 200,000 will be new corporate shares and 300,000 will be issued to the founder and CEO as a secondary offering. The net price of the offering will be $22 and the corporate proceeds are expected to produce $2 million in corporate earnings. Find (1) the corporation’s earnings per share before the offering; (2) the corporation’s expected...
4. A firm has 35,000 shares of stock outstanding, sales of $767,000, net income of $84,900,...
4. A firm has 35,000 shares of stock outstanding, sales of $767,000, net income of $84,900, a price-earnings ratio of 16.4, and a book value per share of $9.60. What is the market-to-book ratio? 3.29 times 4.27 times 3.67 times 4.14 times 3.98 times
Walker Machine Tools has 5.2 million shares of common stock outstanding. The current market price of...
Walker Machine Tools has 5.2 million shares of common stock outstanding. The current market price of Walker common stock is $46 per share rights-on. The company’s net income this year is $16.00 million. A rights offering has been announced in which 520,000 new shares will be sold at $40.50 per share. The subscription price plus eight rights is needed to buy one of the new shares. a. What are the earnings per share and price-earnings ratio before the new shares...
Walker Machine Tools has 6.7 million shares of common stock outstanding. The current market price of...
Walker Machine Tools has 6.7 million shares of common stock outstanding. The current market price of Walker 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. a. What are the earnings per share and price-earnings ratio before the new shares...
Louisiana Timber Company currently has 4 million shares of stock outstanding and will report earnings of...
Louisiana Timber Company currently has 4 million shares of stock outstanding and will report earnings of $6.03 million in the current year. The company is considering the issuance of 2 million additional shares that will net $36 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.)    b-1. Assume the Louisiana Timber Company can earn 12.80 percent on the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT