Q3 - Review Picture.

The Presley Corporation is about to go public. It currently has afterta}: earnings of $1?00,000 and 2,200,000 shares are owned by the present shareholders {the Presley family]. The new public issue will represent 500,000 new shares. The new shares will be priced to the public at $25 per share. with a 5 percent spread on the offering price. There will also be $200,000 in outof-pocket costs to the corporation. a. Compute the net proceeds to the Presley Corporation. Net proceeds $ |:| b. Compute the EPS immediately before the stock issue. {Round the intermediate calculations and the final answer to 2 decimal places.] as. 5: c. Compute the EPS immediately after the stock issue. {Round the intermediate calculations and the final answer to 2 decimal places.) as. is: d. Determine what rate of return must be earned on the net proceeds to the corporation so that there will not be a dilution in EPS during the year of going public. (Round the intermediate calculations and the nal answer to 2 decimal places} Rate of return |:| 96 e. Determine what rate of return must be earned on the proceeds to the corporation so that there will be a 5 percent increase in EPS during the year of going public. {Round the intermediate calculations and the nal answer to 2 decimal places} Rate of return |:| '36