American Health Systems has 6,400,000 shares of stock outstanding and will report earnings of $10 million in

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American Health Systems has 6,400,000 shares of stock outstanding and will report earnings of $10 million in the current year. The company is considering the issuance of 1,700,000 additional shares, which can only be issued at $18 per share.

a. Assume that American Health Systems can earn 6 percent on the proceeds. Calculate earnings per share.

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

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Foundations of Financial Management

ISBN: 978-1259194078

15th edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

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Question Posted: Oct 14, 2014 05:19 AM

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American Health Systems has 6,400,000 shares of stock outstanding and will report earnings of $10 million in

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a Earnings per share before stock issue 100000006400000 156 b N...View the full answer

Foundations of Financial Management

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