Maxwell Corp. is coming to the market with a new offering of 300,000 shares of stock at $25 to the public. Maxwell will receive $22 per share. The firm has 1 million shares outstanding and earnings of $6 million. What is the amount of dilution in earnings per share?
a) $2.00
b) $1.38
c) $1.77
d) No dilution occurs since new money is received by Maxwell.