Wagner Trucking Is Considering Investing in a New Project That

question 70

Multiple Choice

Wagner Trucking is considering investing in a new project that will cost $13 million and increase net income by 6.5 percent.This project will be completely funded by issuing new equity shares.Currently,the firm has 1.25 million shares of stock outstanding with a market price of $42 per share.The current earnings per share are $1.82.What will the earnings per share be if the project is implemented?

• A)$1.39
• B)$1.45
• C)$1.55
• D)$1.62
• E)$1.69

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Definitions:

Asset Account

An account that records the assets owned by a company, showing their value on the balance sheet.

Cash Balance

The amount of cash or cash equivalents a company or individual possesses at any given time.

Disbursements

The act of paying out or distributing money, often by a business for various expenses.

Equipment Account

An account that tracks the cost of equipment a company owns, minus any accumulated depreciation.