Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Stencil, Inc., wishes to expand its facilities. The company currently has 1 5 million shares outstanding and no debt. The stock sells for $ 2
Stencil, Inc., wishes to expand its facilities. The company currently has million shares outstanding and no debt. The stock sells for $ per share, but the book value per share is $ Net income is currently $ million. The new facility will cost $ million, and it will increase net income by $ Assume a constant priceearnings ratio.
a Calculate the new book value per share. Do not round intermediate calculations and round your answer to decimal places, eg
a Calculate the new total earnings. Do not round intermediate calculations.
a Calculate the new EPS. Do not round intermediate calculations and round your answer to decimal places, eg
a Calculate the new stock price. Do not round intermediate calculations and round your answer to decimal places, eg
a Calculate the new markettobook ratio. Do not round intermediate calculations and round your answer to decimal places, eg
b What would the new net income for the company have to be for the stock price to remain unchanged? Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, eg
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started