Solution for QID #39059: 1) Walker Machine Tools has 6.6 million shares of common sto | StudyHelpMe

1) Walker Machine Tools has 6.6 million shares of common stock outstanding. The current market price of Walker common stock is $74 per share rights-on. The company’s net income this year is $23.00 million. A rights offering has been announced in which 660,000 new shares will be sold at $68.50 per share. The subscription price plus eight rights is needed to buy one of the new shares. a. What are the earnings per share and price-earnings ratio before the new shares are sold via the rights offering? (Do not round intermediate calculations and round your answers to 2 decimal places.) b. What would the earnings per share be immediately after the rights offering? What would the price-earnings ratio be immediately after the rights offering? (Assume there is no change in the market value of the stock, except for the change when the stock begins trading ex-rights.) (Do not round intermediate calculations and round your answers to 2 decimal places.)     2) Assume a corporation has earnings before depreciation and taxes of $90,000, depreciation of $40,000, and that it is in a 30 percent tax bracket. Compute its cash flow using the following format. (Input all answers as positive values.)