Question 3.

Wilson Pharmaceuticals has done very well in the stock market during the last three years. Its stock has risen from $25 per share to $50 per share. Its P/E ratio is 12.50. Its current statement of net worth is: Common stock (4 million shares issued; 10 million shares authorized) 58,000,000 Retained earnings 37,000,000 Net worth $95,000,000 a. How many shares would be outstanding after a two-for-one stock split? (Enter the answer In millions.) Number of shares million b. How many shares would be outstanding after a three-for one stock split? (Enter the answer In millions.) Number of shares million C. Assume Wilson earned $16 million. What would its EPS be before and after the two-for-one stock split? (Round the final answers to 2 decimal places.) EPS before split: EPS after 2:1 split EPS after 3:1 split d. What would the price per share be before and after the two-for-one and the three-for-one stock splits? (Assume the P/E ratio of 12.50 stays the same.) (Do not round Intermediate calculations. Round the final answers to 2 decimal places.) Price after 2-1 split Price after 3-1 split