Firm ABC is considering a project costing $5 million. The project will increase net income by $500,000. The company currently has 2 million shares outstanding and no debt. The stock sells for $35 per share and the book value per share is $25. The current net income is $1 million. Assume the firm issues new common stock shares to fund this project while maintaining a constant price-earnings ratio. What will be the earnings per share after the project is completed with the new equity issue?

Multiple Choice

0.6

1.0

0.5

0.7