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Fill in the blanks: Knuddel Corporation is investing PHP600 million in a new business. The present value of the future after-tax cash flows is estimated
Fill in the blanks: Knuddel Corporation is investing PHP600 million in a new business. The present value of the future after-tax cash flows is estimated to be PHP850 million. Knuddel has 200 million outstanding shares with a current market price of PHP32.00 per share. What should be the effect of the investment on the value of the company and the stock price? The NPV of the investment is PHP million. The total market value of the company prior to the investment is PHP million. The value of the company should increase by PHP million to PHP million The price per share should increase by the NPV per share, or PHP per share. The share price should increase from PHP to PHP
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