se in earnings per share shares will be priced to the corporalul 30 Lt the year of going public. e. Determine what rate of return must be earned on the proceeds to the corporation so that there will be a 10 percent increase in earnings per during the year of going public. Northern Airlines is about to go public. It currently has aftertax earnings of $6,000,000 and 4,000,000 shares are owned by the present shareholders. The public issue will represent 300,000 new shares. The new shares will be priced public at $18 per share, with a 4 percent spread on the offering price. There will be $100,000 in out-of-pocket costs to the corporation. a. Compute the net proceeds to the Northern Airlines. b. Compute the EPS immediately before the stock issue. c. Compute the EPS immediately after the stock issue. 5: Long-Term Financing Determine what rate of return must be earned on the net proceeds to the orporation so that there will not be a dilution in EPS during the year of going public. Determine what rate of return must be earned on the proceeds to the corporation so that there will be a 10 percent increase in EPS during the year of going public. I.B. Michaels has a chance to participate in a new public offering by Hi-To Microcomputers. His broker informs him demand for the 500,000 shares issued is very strong. His broker's firm is assigned 15,000 shares in the de and will allow Michaels, a relatively good customer, 1.5 percent of its 1" allocation. initial offering nrice is $30 per share. There is a strong aftermark He is content neue After the first full month after - Political 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 e. going public. Determine what rate of return must be earned on the proceeds to the corporation so that there will be a 10 percent increase in EPS during the year of going public. I.B. Michaels has a chance to participate in a new public offering by Hi-Tech Microcomputers. His broker informs him demand for the 500,000 shares to b ery strong. His broker's firm is assigned 15,000 shares in the distrik Is a relatively good customer, 1.5 percent of its 15,000 tnnl ner share. There is a strong aftermarket, ar firet full month after issu