A company earns $600,000 after taxes in 2006 w/ 300,000 shares of outstanding stock. On 1/1/07 they issued 40,000 new shares, earnings increased by 25% after taxes.

A) compute earnings per share for 2006 and 2007.

What do you think the answers are?

Make an attempt, then we will assist you.

Compute earnings per share for the year 2007 600,000/300,00 = $2 per share
Compute earnings per share for the year 2007 150,000/40,000 = $3.75 per share