A firm has no debt. Existing assets generate earnings (E) of $32 million per year forever. Discount rate is 16%. The firm has 6.25 million shares (n) outstanding and the stock is currently trading at $32 per share. Now the firm plans to invest I=$25 million in a new project. Project will generate $10 million in new earnings forever per year. The firm will issue n new shares at new price P* to finance the project. What is the new price per share, P*, that the new shares be issued if the new shares are priced efficiently?

		P*=$6/share
		P*=$38/share
		P*=$32/share
		P*=$31/share
		P*=$33.6/share