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Kitchens and More is an all-equity firm with 125,000 shares of stock outstanding. The book value per share is $22, and the market-to-book ratio is
Kitchens and More is an all-equity firm with 125,000 shares of stock outstanding. The book value per share is $22, and the market-to-book ratio is 2.4. The current net income is $166,250. An expansion project will cost $1.08 million. Assume the price-earnings ratio remains constant. By what amount must the new project increase the net income for the stock price to remain constant?
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