Should the new issue be undertaken based

Reference no: EM13288440

American Health Systems currently has 6,000,000 shares of stock outstanding and will report earnings of $15 million in the current year. The company is considering the issuance of 1,500,00 additional shares the will net $50 per shares to the corporation.

Question is---

if the 1,500,000 additional shares can only be issued at $28 per share and the company can earn 10 percent on the proceeds, should the new issue be undertaken based on earnings per share?

Reference no: EM13288440

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