1. Sarro Shipping, Inc., expects to earn $1 million per year in perpetuity if it undertakes no new investment opportunities. There are 100,000 shares of stock outstanding, so earnings per share equal $10 ($1,000,000/100,000). The firm will have an opportunity at date 1 to spend $1,000,000 in a new marketing campaign. The new campaign will increase earnings in every subsequent period by $210,000 (or $2.10 per share). This is a 21-percent return per year on the project. The firm’s discount rate is 10 percent. What is the value per share before and after deciding to accept the marketing campaign?