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    After-tax income increase to prevent dilution of EPS

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    Newdex has net income of $2,500,000 and 1,000,000 shares outstanding. It needs to raise $3,610,000 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 5%. How much must Newdex's aftertax income increase to prevent dilution of EPS?

    a) $40,000
    b0 $237,500
    c)$250,000
    d) none of the above

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    https://brainmass.com/business/accounting/after-tax-income-increase-to-prevent-dilution-of-eps-205249

    Solution Preview

    Newdex has net income of $2,500,000 and 1,000,000 shares outstanding. It needs to raise $3,610,000 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 5%. How ...

    Solution Summary

    This gives the steps to calculate after-tax income increase to prevent dilution of EPS

    $2.19

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