Assume that american health systems can earn 9 percent on


Question: American Health Systems has 6,500,000 shares of stock outstanding and will report earnings of $17 million in the current year. The company is considering the issuance of 1,400,000 additional shares, which can only be issued at $28 per share.

a. Assume that American Health Systems can earn 9 percent on the proceeds. Calculate earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.)

b. Should the new issue be undertaken based on earnings per share?

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Management Theories: Assume that american health systems can earn 9 percent on
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