Brown corporation is reviewing its capital budget. It has paid a dividend per share of $3.

Brown corporation is reviewing its capital budget. It has paid a dividend per share of $3.00 for the past several years and the shareholders expect that the dividend will remain constant for the next several years. The companies capital structure is 60% equity and 40% debt; it has 1,000,000 shares of common equity outstanding, and its net income is $8,000,000. The company forecasts that it would require $10 million to fund all of its profitable (positive NPV) projects for the coming year.

Suppose that brown wants to maintain the $3.00 DPS. In addition, the company wants to maintain its $10 million capital budget. What is the minimum dollar amount of new common stock that the company would have to issue in order to meet its objectives.