Newdex Has Net Income of $3,000,000 (INCLUDING the Effect of Expected

question 41

Multiple Choice

Newdex has net income of $3,000,000 (INCLUDING the effect of expected underwriting costs) and 1,000,000 shares outstanding. It needs to raise $5,000,000 in funds for a new asset. Its investment banker plans to sell an issue of common stock to the public for $40, less a spread of 10%. How much must Newdex's after-tax income be to prevent dilution of earnings per share?

• A) $3,040,000
• B) $3,416,667
• C) $3,350,000
• D) $3,375,000

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Definitions:

EEG Record

A record of the electrical activity of the brain obtained through electrodes placed on the scalp, used in medical and research settings to analyze brain function.

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