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Wayne, Inc., wishes to expand its facilities. The company currently has 6 million shares outstanding and no debt. The stock sells for $28 per share,
Wayne, Inc., wishes to expand its facilities. The company currently has 6 million shares outstanding and no debt. The stock sells for $28 per share, but the book value per share is $8. Net income is currently $4.2 milion. The new facility will cost $42 milion, and it will increase net income by $810,000. Assume a constant price-earnings ratio a-1. Calculate the new book value per share. (Do not round intermediate calculations a-2. Calculate the new EPS. (Do not round intermediate calculations and round your a-3. Calculate the new stock price. (Do not round intermediate calculations and round a-4. Calculate the new market-to-book ratio. (Do not round intermediate calculations b. What would the new net income for the company have to be for the stock price to and round your answer to 2 decimal places, e.g., 32.16.) answer to 4 decimal places, e.g., 32.1616.) your answer to 2 decimal places, e.g., 32.16.) and round your answer to 4 decimal places, e.g., 32.1616.) remain unchanged? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g., 1,234,567.) a-1. New book value per share a-2. New EPS a-3. New stock price a-4. New market-to-book ratio b. Net income
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