rights issue would raise a total of 60 million. What is the subscription price? 12. Dilution Elvis Heavy Metal Mining (EHMM) plc. wants to diversify its operations. Some recent financial information for the company is shown here: Share price () 98 Number of shares outstanding 14,000 Total assets () 6,000,000 Total liabilities () 2,400,000 Net income () 630,000 EHMM is considering an investment that has the same P/E ratio as the firm. The cost of the investment is 1,100,000, and it will be financed with a new equity issue. The return on the investment will equal EHMM's current ROE. What will happen to the book value per share, the market value per share, and the EPS? What is the NPV of this investment? Does dilution take place? 13. Dilution In the previous problem, what would the ROE on the investment have to be if we wanted the price after the offering to be 98 per share? (Assume the P/E ratio remains constant.) What is the NPV of this investment? Does any dilution take place? eda 000 Dashboard