The Hamilton Corporation has 5 million shares of stock outstanding and will report earnings of $6,990,000 in the current year. The company is considering the issuance of 2 million additional shares that can only be issued at $36 per share.

a. Assume the Hamilton Corporation can earn 8.00 percent on the proceeds. Calculate the earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.)

b. Should the new issue be undertaken based on earnings per share?

multiple choice

• Yes

• No