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Walker Machine Tools has eight million shares of common stock outstanding. The current market price...

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Walker Machine Tools has eight million shares of common stock outstanding. The current market price of Walker common stock is $52 per share rights-on. The company's net income this year is $17.5 million. A rights offering has been announced in which 550,000 new shares will be sold at $46.5 per share. The subscription price of $46.5 plus 5 rights is needed to buy one of the new shares. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) a. What are the EPS and P/E ratio before the new shares are sold via the rights offering? b. What would be the EPS immediately after the rights offering? What would be the P/E ratio immediately after the rights offering? (Assume there is no change in the market value of the common stock, except for the change that occurs when the stock begins trading ex-rights.)

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