SECTION B-Problem 5 (5+5 points)

1.Marino Companys common stock currently sells for Tk.50 per share. Marino expects to make a right offering of 3 rights for every share owned at a subscription price of Tk.40 per share. Without using any formula, calculate the expected market value of a right.

2.At sales of Tk.500,000, Gomers Companys Degree of operating leverage (DOL) is 2.80, its degree of financial leverage (DFL) is 1.786, and it earnings per share is Tk.9.00. Gomer expects that the sales in the next year shall be Tk.450,000. In such case, what earnings per share can the firm expect in the next year?

please write with explanation