Bindex Has Net Income of $2,500,000 and 1,000,000 Shares Outstanding

question 69

Multiple Choice

Bindex has net income of $2,500,000 and 1,000,000 shares outstanding. Its common stock is currently selling for $40 per share. It needs to raise $3,610,000 in funds for a new asset. Its investment dealer plans to sell an issue of common stock to the public for $38 for a spread of 5%. How much must Bindex's aftertax income increase to prevent dilution of EPS?

• A) $40,000
• B) $237,500
• C) $250,000
• D) none of the other answers are correct

---

Definitions:

Attention Narrowing

The phenomenon where focus is restricted to a limited range of stimuli or tasks, ignoring peripheral information.

Stimulants

Drugs that have activating or excitatory effects on brain or bodily functions.

Alcohol

A psychoactive substance commonly found in beverages such as beer, wine, and spirits, known for its depressant effects on the central nervous system.

Depressant

A category of psychoactive drugs that reduce arousal and stimulation, affecting the central nervous system to slow down bodily functions.