1. Earnings per share will increase when:
A. depreciation decreases. B. the number of shares outstanding increase. C. operating income decreases. D. dividends per share decrease. E. the average tax rate increases.
2. A recent offering of Talmot Corporation stock was underwritten by Advantage Securities. The terms were: Price to public $10 per share, number of shares 10 million, and proceeds to Talmot $45,000,000. The out-of-pocket expenses incurred by Advantage Securities in the design and distribution of the issue were $1,200,000. Talmot will incur expenses of $900,000. What profit or loss would Advantage Securities realize if the issue were sold to the public at $10 per share:
a. $2,900,000
b. $4,100,000
c. $5,000,000
d. $3,800,000
e. none of the above