Problem:
Fantic Fast Foods had earnings after taxes of $390000 in the year 2009 with 300,000 shares outstanding. On January 1, 2010the firm,issued 25,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 20 percent.
Required:
Question 1: Compute earnings per share for the year 2009.
Question 2: Compute earnings per share for the year 2010.
Note: Provide support for rationale.