In the previous problem, if the 1 million additional shares can be issued only at $23 per share and the company can earn 6.0 percent on the proceeds, should the new issue be undertaken based on earnings per share?

Previous Problem

The Hamilton Company currently has 4 million shares of stock outstanding and will report earnings of $6 million in the current year. The company is considering the issuance of 1 million additional shares of stock that will net $30 per share to the corporation.