American Health Systems has 5,600,000 shares of stock outstanding and will report earnings of $17 million in the current year. Thecompany is considering the issuance of 1,300,000 additional shares, which can only be issued at $21 per share.a. Assume that American Health Systems can earn 4 percent on the proceeds. Calculate earnings per share. (Do not roundintermediate calculations and round your answer to 2 decimal places.)Earnings per shareb. Should the new issue be undertaken based on earnings per share?O YesO No10BNext >

Earnings per share (EPS) refers to the earnings of the company per outstanding share. It is measured…

Answered: American Health Systems has 5,600,000…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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