Question
18. Numerical stock issuance problem I Consider a firm that is 20% debt financed. The assets are composed of cash 25 million and fixed assets
18. Numerical stock issuance problem I Consider a firm that is 20% debt financed. The assets are composed of cash 25 million and fixed assets 60. (a) Construct the balance sheet. (b) If there are 20 million shares, what is the price per share?(c) The firm discovers a project which costs 15 and generates NPV=5. Construct the new balance sheet under the assumption that the firm finances the project internally? (d) What is the price per share with the project? (e) If the firm would finance the project with new equity, what would be the new balance sheet after the investment?
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