How much must newdex after-tax income increase

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Problem 1: Newdex has net income of $3,500,000 (INCLUDING the effect of expected out-of-pocket costs) and 1,000,000 shares outstanding. It needs to raise $5,500,000 in funds for a new asset. Its investment banker plans to sell an issue of common stock to the public for $30, less a spread of 10%. How much must Newdex's after-tax income increase by to prevent dilution of earnings per share? (Round "EPS" to 1 decimal place, intermediate and final answers to the nearest whole dollar amount.)

Multiple Choice

Option 1: $408,333
Option 2: $712,964
Option 3: $641,667
Option 4: None of these

Reference no: EM132859110

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