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Alpha Inc. currently has 5,400,000 shares of stock outstanding and will report earnings of $2,500,000...

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Accounting

Alpha Inc. currently has 5,400,000 shares of stock outstanding and will report earnings of $2,500,000 in the current year. The company is considering the issuance of 1,700,000 additional shares that will net $20 per share to the corporation. Assume the Alpha can earn 14.5% on the proceeds of the stock issue in time to include it in the current years results. a. What is the immediate dilution potential for this new stock issue? $ Round your answer to the nearest cent. b. Should the new issue be undertaken based on earnings per share? Yes, because the final EPS = $1.05 is larger than the beginning EPS = $0.46

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