Teardrop, Inc., wishes to expand its facilities. The company currently has 15 million shares outstanding and no debt. The current stock sells for $21 per share, but the book value per share is $10. Net income for Teardrop is currently $4.0 million. The new facility will cost $50 million, and it will increase net income by $660,000. The project is financed by the new equity. Assume a constant priceearnings ratio.

a-1. Calculate the new book value per share. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Book value $ per share

a-2. Calculate the new total earnings. (Enter your answer in dollars, not millions of dollars, (e.g., 1,234,567). Do not round intermediate calculations and round your answer to the nearest whole dollar amount. (e.g., 32))

Total earnings $

a-3. Calculate the new EPS. (Do not round intermediate calculations and round your final answer to 4 decimal places. (e.g., 32.1616))

EPS $ per share

a-4. Calculate the new stock price after taking the new project. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Stock price $

a-5. Calculate the new market-to-book ratio. (Do not round intermediate calculations and round your final answer to 4 decimal places. (e.g., 32.1616))

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. Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

Net income $

Teardrop, Inc., wishes to expand its facilities. The company currently has 15 million shares outstanding and no debt. The current stock sells for $21 per share, but the book value per share is $10. Net income for Teardrop is currently $4.0 million. The new facility will cost $50 million, and it will increase net income by $660,000. The project is financed by the new equity. Assume a constant price-earnings ratio a-1.Calculate the new book value per share. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16) Book value r share a-2.Calculate the new total earnings. (Enter your answer in dollars, not millions of dollars, (e.g., 1,234,567). Do not round intermediate calculations and round your answer to the nearest whole dollar amount. (e.g., 32)) Total earnings a-3.Calculate the new EPS. (Do not round intermediate calculations and round your final answer to 4 decimal places. (e.g., 32.1616)) EPS per share a-4. Calculate the new stock price after taking the new project. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Stock price a-5.Calculate the new market-to-book ratio. (Do not round intermediate calculations and round your final answer to 4 decimal places. (e.g., 32.1616)) 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. Enter your answer in dollars, not millions of dollars, i.e 1,234,567.) Net income