So if they expect to earn $1 per share in 2013, shares can only be issued at a min pps of $2.5 in order for the dilution to be accretive. Am I correct?
Yes, this is the basics of it. Instead of making $100M with 100M shares ($1.00 per share), they would make $110M with 110M shares (also $1.00 per share). They would issue 10m shares to raise cap ex funds by $25M and get a 40% return, or $10M.
We are talking about the return on investment for capital development expenses; specifically the last portion of funds from equity dilution.
This has nothing to do with land or return on equity.
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