Penrod Autoservice Ltd. has 200,000 common shares at a market value of $10 per share, and a net income after tax of $90,000. The company would like to issue 30,000 more shares at $10 per share. How much income after tax will the company have to earn to maintain current shareholders' wealth?

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To maintain the current shareholders' wealth, the company must maintain the same earnings per share (EPS) after issuing new shares. Initially, the EPS is $90,000 / 200,000 shares = $0.45 per share. After issuing 30,000 more shares, the total shares will be 230,000. To maintain an EPS of $0.45 with 230,000 shares, the company must earn $0.45 * 230,000 = $103,500.