Moose Pastures Inc $($MPI$)$ has $$8$ million in cash that it can distribute to share holders or invest

in a project. If they invest, the payoff will be $$8\mathrm{.}802$ million in one year. The current market

value of equity is $$63$ million and there are $1$ million shares outstanding. If MPI decides to

forego the distribution to shareholders and make the investment, how much will the share

price change? Assume the WACC of MPI is $12\mathrm{.}125\%.$ Answer is B $($The share price falls by $$015$ to $$62\mathrm{.}85).$ Please show calculation clearly step by step until getting the right answer.

A$)$ The share price is unchanged.

B$)$ The share price falls by $$0\mathrm{.}15$ to $$62\mathrm{.}85.$

C$)$ The share price rises by $$0\mathrm{.}09$ to $63\mathrm{.}09.$

D$)$ The share price falls by $2\mathrm{.}1\%$ to $61\mathrm{.}68.$

E$)$ The share price rises by $10\%$ to $$69\mathrm{.}32.$

$25.$