Answer:
Missing question is "<em>a. Compute the net proceeds to the Presley Corporation. (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Net proceeds </em>
<em>b. Compute the earnings per share immediately before the stock issue. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share</em>
<em>c. Compute the earnings per share immediately after the stock issue. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share "</em>
a. Net proceeds = Shares issued * Share price*(1-0.04) - Direct cost
Net proceeds = 500,000 * $25*(1-0.04) - $250,000
Net proceeds = 500,000*$24 - $250,000
Net proceeds = $12,000,000 - $250,000
Net proceeds = $11,750,000
b. EPS = Earnings / Shares
EPS = $7,000,000 / 2,000,000 shares
EPS = $3.50 per share
c. EPS = After tax earnings / Total shares
EPS = $7,000,000 / (2,000,000 + 500,000)
EPS = $7,000,000 / 2,500,000 shares
EPS = $2.80 per shares
