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The Tractor Corp. needs to raise money for an addition to its equipment. It will issue 300,000 shares of new common stock. The new shares
The Tractor Corp. needs to raise money for an addition to its equipment. It will issue 300,000 shares of new common stock. The new shares will be priced at $60 per share with an 8.5% spread on the offer price. There will be additional out-of- pocket expenses of $150,000. Presently Tractor Corp has earnings of $3 million and 750,000 shares outstanding. A) Compute the EPS before the new shares are issued, round answers to two decimal places. $ B) Compute the EPS after the new shares are issued, round answers to two decimal places. $ C) Compute the net proceeds to Tractor Corp from the share issuance. $ D) How much additional net income is required, so that no dilution of earnings per share occurs? $
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