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

question 22

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% on offer price.How much must Bindex's after-tax income increase to prevent dilution of EPS?

• A) $40,000
• B) $237,500
• C) $250,000
• D) $361,000

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Definitions:

Ivy Lee

A pioneer in public relations and communications, known for his development of modern public relations strategies and crisis communication.

Importance

The state or quality of being significant, valuable, or of great concern in a particular context or to a particular entity.

Prioritization

The process of ranking tasks, projects, or objectives in order of importance or urgency to ensure efficient use of time and resources.

Organizational Culture

The shared values and beliefs in an organization and its workforce.