KMJ has $7 million in after-tax earnings, 2 million shares outstanding each priced at $24. KMJ is considering acquiring XLT. XLT has $1.7 million in after-tax earnings, 1.1 million shares outstanding each priced at $16. KMJ believes that the acquisition will yield $600,000 in immediate synergistic earnings. KMJ is planning to bid with an offer price of $19. Determine the percentage of dilution (percentage decrease) in KMJs EPS as a result of the acquisition.

-1.17%

-2.98%

-5.47%

-7.43%