Louisiana Timber Company currently has $3$ million shares of stock outstanding and will report earnings of $$6\mathrm{.}5$ million in the current year. The company is considering the issuance of $2$ million additional shares that will net $$34$ per share to the corporation.

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

Assume the Louisiana Timber Company can earn $11\mathrm{.}6$ percent on the proceeds of the stock issue in time to include it in the current year$$s results. Should the new issue be undertaken based on earnings per share?