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BEC Corp, a company all - equity financed, currently has assets of $ 2 5 0 million and expects to earn a return of 1

BEC Corp, a company all-equity financed, currently has assets of $250 million and expects to earn a return of 10% during the year. There are 20 million shares of BEC stock outstanding. The firm has an opportunity to invest in a positive NPV project that will cost $25 million over the year, and it is trying to determine if it should finance this investment by retaining profit over the course of the year or whether it should pay the profits earned as dividends and issue new shares to finance the investment. Calculate the share price after paying out dividends of $25 million and the total value of equity, if the firm pays out dividends and issues new equity.

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