Question

P15-8 Price Dilution [LO3]

Left Turn, Inc., has 176,000 shares of stock outstanding. Each share is worth $100, so the company's market value of equity is $17,600,000.

Required:

(a)	Suppose the firm issues 22,000 new shares at the price of $100, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.)

      (Click to select) 0.25, 0.00, 80.00, 60.50, -0.25  
  

(b)	Suppose the firm issues 22,000 new shares at the price of $93, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.)

     (Click to select) 78.60, -0.74, 58.60, -0.82, -0.78

(c)	Suppose the firm issues 22,000 new shares at the price of $71, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.)

      (Click to select) -3.38, -3.22, -3.06, 74.20, 54.20

Answer 1