Maxwell Corp. is coming to the market with a new offering of 300,000 shares, 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? Select one: a. $2.00. O b. $1.38. C. $1.77. O d. No dilution occurs since new money is received by Maxwell. Next page

Maxwell Corp. is coming to the market with a new offering of 300,000 shares, 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? Select one: a. $2.00. b. $1.38. c. $1.77. d. No dilution occurs since new money is received by Maxwell