Problem of the hamilton corporation

Reference no: EM131794432

Question: 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.)

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

Reference no: EM131794432

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