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:

Projection

A psychological defense mechanism where individuals attribute their own unacceptable thoughts or feelings to others.

Sounding Board

An individual or group used to test out ideas or opinions to gain feedback or insights.

Hands-on Experience

Direct involvement in performing tasks or activities, providing practical experience rather than theoretical knowledge.

Auditory

Pertaining to the sense of hearing, including the abilities to hear, listen, and process sounds.