Compute the potential dilution from this new stock issue

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Reference no: EM13276353

The Houston Corp. needs to raise money for an addition to its plant. It will issue 300,000 shares of new common stock. The new shares will be priced at $60 per share with an 8.5% spread on the offer price. Registration costs will be $150,000. Presently Houston Corp has earnings of $3 million and 750,000 shares outstanding. Compute the potential dilution from this new stock issue. Round your answer to the nearest penny and omit the dollar sign.

Reference no: EM13276353

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