Question in problem if the 1500000 additional shares can, Ask an Expert

Finance

Question: In Problem, 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?

Problem: 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 1,500,000 additional shares that will net $50 per share to the corporation.

a. What is the immediate dilution potential for this new stock issue?

b. Assume that American Health Systems can earn 12 percent on the proceeds of the stock issue in time to include them in the current year's results. Should the new issue be undertaken based on earnings per share?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92596481

Have any Question?Write your Review or question?

Related Questions in Basic Finance

What do we mean by financial intelligence how to assess a

What do we mean by financial intelligence? How to assess a company's health? Use the plain language to define operating experience, capital expenditure, accruals, depreciation, and goodwill. Describe differences between ...

Anbspbbb-rated corporate bond has a yield to maturity of

A? BBB-rated corporate bond has a yield to maturity of 12.8%. A U.S. treasury security has a yield to maturity of 11.4%. These yields are quoted as APRs with semiannual compounding. Both bonds pay? semi-annual coupons at ...

Bond a is a 1-year zero-coupon bond bond b is a 2-year

Bond A is a 1-year zero-coupon bond. Bond B is a 2-year zero-coupon bond. Bond C is a 2-year 10% coupon bond that pays annually. The yield to maturity (annually compounded) on bond A is 10%, and the price of bond B is $8 ...

If i have all of the information is someone willing to

If I have all of the information, is someone willing to figure out ratios for me and provide the steps? I have two assignments that I want to get done today. I just do not have the patience to figure out how to plug the ...

Assignment -background - youre a group of investment

Assignment - BACKGROUND - You're a group of investment analysts who work for a large investment consulting firm based in Australia. There's one big institutional investor from overseas that is interested in investing in ...

A project has an initial cost of 30000 and will produce

A project has an initial cost of $30,000 and will produce cash inflows of 8000 per year for the next five years. In addition, the project will have a salvage value of $2000 at the end of its useful life. Find the net pre ...

Please show all workkanab co and zion co are us companies

Please Show All Work Kanab Co. and Zion Co. are U.S. companies that engage in much business within the U.S. and are about the same size. They both conduct some international business as well. Kanab Co. has a subsidiary i ...

Emmett corporation has issued a 1000 face value zero coupon

Emmett Corporation has issued a $1000 face value zero coupon bond. Which of the following values is closest to the correct price for the bond if the appropriate discount rate is 4% and the bond matures in 7 years?

1 what is the price of a semiannual 1000 par value bond

1) What is the price of a semiannual $1,000 par value bond with four years left until maturity that pays a coupon of 3.75% and is yielding 5.25%? What would it be yielding if the price decreased to $973.47? Assume semian ...

Us bank has determined that its bond portfolio has a

US Bank has determined that its bond portfolio has a duration of 9.5 years and a prevailing yield to maturity of 4.0 percent. If the yield to maturity changes to 5.5 percent, then US Bank should anticipate how much of a ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert