Johnson Inc. wishes to expand its facilities. The company currently has 6 million shares outstanding and no debt. The stock sells for $50 per share, but the book value per share is $20. Net income for Johnson is currently $12 million. The new facility will cost $20 million, and it will increase net income by $800,000. Johnson raises stock at the current price to finance the facility. Assume a constant priceearnings ratio.

a. Calculate the new book value per share.

b. Calculate the new stock price.

c. Does book value dilution occur?

d. Does stock price dilution occur?