Problem 17-16 Relation of rights to EPS and the price-earnings ratio [LO17-3] Walker Machine Tools has 6 million shares of common stock outstanding. The current market price of Walker common stock is $62 per share rights-on. The company's net Income this year is $20.00 million. A rights offering has been announced in which 600,000 new shares will be sold at $56.50 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 are sold via the rights offering? (Do not round Intermediate calculations and round your answers to 2 decimal places.) Eamings per share Price-eamings ratio b. What would the earnings per share be immediately after the rights offering? What would the price-earnings ratio be immediately after the rights offering? (Assume there is no change in the market value of the stock, except for the change when the stock begins trading ex-nights) (Do not round Intermediate calculations and round your answers to 2 decimal places.) Earnings per share Price-eamings ratio