Question
T he Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here: Stock price
The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here: Stock price $ 60 Number of shares 20,000 Total assets $ 8,400,000 Total liabilities $ 3,900,000 Net income $ 870,000 MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $600,000, and it will be financed with a new equity issue. The ROE on the investment would have to be percent (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) if we wanted the price after the offering to be $60 per share (assume the PE ratio remains constant), and the NPV of the investment would be $ (Leave no cells blank - be certain to enter "0" wherever required.). Accounting dilution (Click to select) occur in this case. Market value dilution (Click to select) occur in this case.
The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here: Stock price Number of shares Total assets Total liabilities Net income s 60 20,000 $ 8,400,000 $ 3,900,000 $ 870,000 MHMM is considering an investment that has the same PE ratio as the fim. The cost of the investment is $600,000, and it will be financed with a new equity issue. The ROE on the investment would have to be percent (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) if we wanted the price after the offering to be $60 per share (assume the PE ratio remains constant), and the NPV of the investment would be s (Leave no cells blank - be certain to enter "O" wherever required.). Accounting dilution (Click to select) occur in this case. Market value dilution (Click to select) occur in this caseStep by Step Solution
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