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What is the effect on earnings per share

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Question 1: Fifo Inc. raises $4 million dollars by issuing shares of common stock. The market rate of interest is 10% at the time of issue. Assuming a corporate income tax rate of 30%, 100,000 common shares issued, and an increase in net income of $1,000,000 due to the additional resources, what is the effect on earnings per share?

Option a. $40 increase

Option b. $28 increase

Option c. $4.20 increase

Option d. $7 increase

Reference no: EM132504642

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