Questions on share dilution

Say Company ABC projects a FY 2013E net income of 300mm. Currently they have 100mm shares outstanding. So FY 2013E EPS will be $3/share.

Now say the company will issue another 100mm new shares on 10/1/2013.

When we re-calculalate the FY 2013E P/E post the equity issuance, which number of shares basis shall we use here:

1) Use weighted avg number of shares, so will be 100 * 1 + 100 * 0.25 = 125mm, new EPS will be $2.4/share

2) Just add the number of new shares issued, so will be 100 + 100 = 200mm, new EPS will be $1.5/share

Which one is the right approach? Or say the more conventional approach?

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