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Having some trouble with this. The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is

Having some trouble with this.

The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here:

Stock price $80

Number of shares40,000

Total assets $8,800,000

Total liabilities $5,100,000

Net income $900,000

The company is considering an investment that has the same PE ratio as the firm. The cost of the investment is $640,000, and it will be financed with a new equity issue.

The ROE on the investment would have to be_____ percent if we wanted the price after the offering to be $80 per share (assume the PE ratio remains constant), and the NPV of the investment would be $________

ROE INVESTMENT =

NPV OF INVESTMENT =

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