Hammond industries is expecting to pay an annual dividend per share of $1.50 out of annual earnings per share of $4.50. currently, hammond's stock is selling for $40 per share. adhering to the company's target capital structure, the firm has $20 million in assets, of which 45% is funded by debt. assume that the firm's book value of equity equals its market value. in past years, the firm has earned a return on equity (roe) of 15%, which is expected to continue this year and into the foreseeable future. suppose the firm has decided to proceed with its plan of disbursing $1.50 per share to shareholders, but the firm intends to do so in the form of a stock dividend rather than a cash dividend. the firm will allot new shares based on the current stock price of $40. in other words, for every $40 in dividends due to shareholders, a share of stock will be issued. if this plan is implemented, how many new shares of stock will be issued, and by how much will the company's earnings per share be diluted?