C) What is the new stock price?

D)Does accounting dilution occur? Explain why or why not.

A company has $1,400,000 in assets, 400 bonds with face value of $1000, and net income of $150,000. The company has 80,000 shares outstanding, and currently considering an investment that has the same P/E ratio as the firm. The fund required for the investment is $500,000, which will be financed with new equity issue. The company's stock price is $25 per share. Assume that the return on the investment will be the same as the company's current ROE. a) How many new shares should be issued? b) What is the new EPS