In the previous problem, what would the ROE on the investment have to be if we wanted the price after the offering to be $96 per share (assume the PE ratio still remains constant)? What is the NPV of this investment? Does any dilution take place?

Data from Previous Problem

Tom and Jerry, Inc., wishes to expand its facilities. The company currently has 10 million shares outstanding and no debt. The stock sells for $20 per share, but the book value per share is $40. Net income for Tom and Jerry is currently $10 million. The new facility will cost $31 million, and it will increase net income by $500,000.