SIVE Answer A firm has no debt. Existing assets generate earnings (E) of $35 million per year forever. Discount rate is 14%. Firm has 12.5 million shares (n) currently selling at $20 per share. Now firm plans to invest 1-512 million in a new project. The new project will generate $7 million in new earnings forever per year. The firm will issue An new shares at new price, p*-$25 per share, to finance the project. Select a false statement about this fimm. NPV of the new project is $38ml. Wf the new shares are issued at $25 per share to finance the project, firms should issue OABmil, number of new shares, If the new shores are issued at $25 per share, there will be price adjustments dowrward after the issuanice. The EPS of the firm with the new project, when the new shares are issued at $25 per share, is 3.24. The expected return for the new shareholders, when the new shares are issued at $25 per share, is 164