Question
Metallica Heavy Metal Mining Corporation wants to diversify its operations. Some recent financial information for the company is shown here: Stock price----------------------- $ 74 Number
Metallica Heavy Metal Mining Corporation wants to diversify its operations. Some recent financial information for the company is shown here:
Stock price----------------------- $ 74
Number of shares---------------30,000
Total assets -----------------------$ 9,800,000
Total liabilities --------------------$ 4,700,000
Net income ------------------------$ 420,000
Company is considering an investment that has the same PE ratio as the firm. The cost of the investment is $640,000, and it will be financed with a new equity issue. The return on the investment will equal the company's current ROE.
Tell me the current book value per share and the book value per share with the investment?
Book value per share
Current$ _____
New$ _______
Tell me the current market-to-book ratio and the market-to-book ratio with the investment?
Market-To-Book
Current _____
New _____
What is the current EPS and the EPS with the investment?
Earnings per share
Current $ ____
New $ ____
What is the NPV of this investment?
$ ______
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