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QUESTION 2 ABC Corporation is considering an investment that has the same P/E ratio as the firm. The cost of the investment is $500.000. and
QUESTION 2 ABC Corporation is considering an investment that has the same P/E ratio as the firm. The cost of the investment is $500.000. and it will be financed with a new equity issue. The return on the investment will equal ABC's current ROE. Some recent financial information for the company is shown here: Stock price Number of shares Total assets Total liabilities Total Equity Net income $ 75 50.000 $ 6,500,000 $ 2.100,000 $ 4,400,000 S 650.000 What will happen to the book value per share? What is the reason behind this change
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