Chancery Inc. wishes to expand its facilities. The company currently has 5 million shares outstanding and no debt. The stock sells for $29 per share, but the book value per share is $7. Net income is currently $3.2 million. The new facility will cost $45 million, and it will increase net income by $900,000. Assume a constant priceearnings ratio.

a-1 Calculate the new book value per share. (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

Book value $

a-2 Calculate the new total earnings. (Omit $ sign in your response.)

Total earnings $

a-3 Calculate the new EPS. (Do not round intermediate calculations. Round the final answer to 4 decimal places. Omit $ sign in your response.)

EPS $ per share

a-4 Calculate the new stock price. (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

Stock price $

a-5 Calculate the new market-to-book ratio. (Do not round intermediate calculations. Round the final answer to 4 decimal places.)

Market-to-book ratio

b. What would the new net income for the company have to be for the stock price to remain unchanged? (Do not round intermediate calculations. Round the final answer to the nearest whole dollar. Omit $ sign in your response.)

Net income $