Suppose that a bank needs to raise $1 million new capital in the form of common stocks (50,000 shares each $20) to meet minimum capital requirements. It currently has 3 million shares each worth $1. The bank expects its totaloperatng revenue and expenses reach to $50 and $30 million. respectvely. Compute the impact of rasing capital on bank earning pershare. (Assume tax rate is 10%)
