UBC wants to expand. The company currently has 8 million shares outstanding and no debt. The stock sells for $60 per share, but the book value per share is $40. The firm's net income is currently $9 million. The expansion will cost $32 million, and it will increase net income by $400,000. Assume the firm issues new equity to fund this expansion while maintaining a constant price-earnings ratio. What will be the EPS be after the new equity issue?

Answer rating: 100% (QA)

To find the new Earnings Per Share EPS after the equity issue we first need to calculate ... View the full answer