The Hamilton Corporation has 2 million shares of stock outstanding and will report earnings of $6,700,000 in the current year. The company is considering the issuance of 1 million additional shares which can only be issued at $37 per share.
a. Assume the Hamilton Corporation can earn 7.00 percent on the proceeds. Calculate the earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.)
Earnings per share
b. Should the new issue be undertaken based on earnings per share?
No
Yes