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Savings and Loan Corp currently has 7.5 million in shares outstanding and will report earnings of 22.5 million in the current year. The company is

Savings and Loan Corp currently has 7.5 million in shares outstanding and will report earnings of 22.5 million in the current year. The company is considering the addition of 1 million additional shares of stock that will net the company $25 per share.

a.What is the immediate dilution for this new share issue?

b.If they can earn 10% on the proceeds of the share issue in time to include it in the

current year's results. Should the new issue be undertaken based on earning per share

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