What is the amount of dilution in earnings per share

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Reference no: EM131299988

1. A 20-year bond pays 6% on a face value of $1,000. If similar bonds are currently yielding 5%, what is the market value of the bond? Use annual analysis.

A. Over $1,100

B. Under $1,000

C. Under $900

D. Not enough information given to tell

2. Maxwell Corp. is coming to the market with a new offering of 450,000 shares of stock at $22 to the public. Maxwell will receive $19 per share. The firm has 1 million shares outstanding and earnings of $6 million. What is the amount of dilution in earnings per share?

A. $1.86

B. $1.38

C. $1.77

D. No dilution occurs since new money is received by Maxwell.

Reference no: EM131299988

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