XHB is planning to expand its manufacturing capacity with a $2 million investment in new machinery. XHB plans to maintain its current 20% debt-to-total assets ratio for its capital structure and to maintain its dividend policy in which at the end of each year it distributes 40% of the year's net income. This year's net income was $8 million. How much external equity must XHB seek now to expand as planned?

Select one:

a. $1.5 millionb. $0c. $4 milliond. $6 millione. $3.2 million