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

question 31

Multiple Choice

Newdex has net income of $3,000,000 (INCLUDING the effect of expected out-of-pocket 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

---

Definitions:

Social Groups

Collections of individuals who interact with each other and share similar characteristics and a sense of unity.

Inconvenient Fact

Information or data that contradicts currently held beliefs, assumptions, or the interests of a particular group.

Sociologists

Experts who study the development, structure, and functioning of human society.

Same-Sex Couples

Romantic or marital partnerships between two individuals of the same sex.