1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nezavi [6.7K]
3 years ago
7

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
Business
1 answer:
kkurt [141]3 years ago
6 0

Answer:

$416,667

Explanation:

Current EPS = $3,000,000 / 1,000,000

Current EPS = $3

Net Proceeds per share = $40 * 90%

Net Proceeds per share = $36  

New Number of Shares = $5,000,000 / $36

New Number of Shares = 138888.88

Total Number of Shares Outstanding after the new issue = 1138888.88 shares

Diluted EPS = $3,000,000 / 1138888.88

Diluted EPS = $2.634

Amount of Dilution in EPS = $3 - $2.634

Amount of Dilution in EPS = $0.3658

Net Income must increase by 1138888.88 * $0.3658 = $416,667. So, Newdex's after-tax income must increase to $416,667 to prevent dilution of earnings per share.

You might be interested in
What is the amount of money you still owe to their credit card company called
irina1246 [14]
Are you talking about Debt?
7 0
2 years ago
Read 2 more answers
At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has
forsale [732]

Based on the information given, Martha is incorrect. Sam's quantity demand has decreased.

<h3>What is demand?</h3>

Demand means the quantity of a good and services that consumers are willing and able to buy at various prices during a given period of time

In this case, Martha is incorrect. This is because Sam's quantity demanded has decreased, and his demand has not changed.

Learn more about demand on:

brainly.com/question/1245771

5 0
2 years ago
Parsons Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last
arsen [322]

Answer:

option (C) 32,750 hours

Explanation:

Data provided in the question:

Actual manufacturing overhead cost = $250,000

Overapplied overhead = $12,000

Predetermined overhead rate = $8.00 per direct labor-hour

Now,

The total Manufacturing Overhead applied last year

= Actual manufacturing overhead cost + Overapplied overhead

=  $250,000 + $12,000

= $262,000

Therefore,

Direct Labor Hours worked last year = \frac{\textup{Total Manufacturing Overhead applied}}{\textup{Predetermined overhead rate}}

or

=  \frac{\textup{262,000}}{\textup{8}}

= 32,750 hours

Hence,

The correct answer is option (C) 32,750 hours

6 0
3 years ago
Which is an independent variable in a study where tractor supply, a retailer of garden and farming equipment, increases the pric
Gelneren [198K]

The independent variable is the one being manipulated (or changed) in order to study the effects. In this case the independent variable is the $5 price change.

6 0
3 years ago
Which of the following is a disadvantage of partnerships compared to sole proprietorships?
GarryVolchara [31]
C. It is sometimes difficult for partners to agree on every business decision.
6 0
3 years ago
Other questions:
  • A loan of $32,000 is to be repaid by the sinking fund method with annual payments. Interest on the loan is paid at a 6% annual e
    10·1 answer
  • When kelly reprimands sarah each time sarah is late for work, kelly is applying?
    10·1 answer
  • 1. Your roommate's long hours in chem lab finally paid off--she discovered a secret formula that lets people do an hour's worth
    15·1 answer
  • A and B have a written contract whereby A agrees to sell B a plot of land for $100,000. Later, without terminating the first con
    5·1 answer
  • Armour, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was esti
    13·1 answer
  • The WCU maintenance department used 850 brackets during the course of a year. The brackets are purchased from a supplier in Ashe
    9·1 answer
  • Analyze the role individual team members and leaders play in ensuring or detracting from team success. In the analysis, consider
    7·1 answer
  • Burkhardt Corp. pays a constant $15.25 dividend on its stock. The company will maintain this dividend for the next 9 years and w
    5·1 answer
  • Weighted Average Method, FIFO Method, Physical Flow, Equivalent Units Heap Company manufactures a product that passes through tw
    7·1 answer
  • Data classification for retention of information is typically ______ for financial and tax records?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!