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?