Question
The Metallica Heavy Metal Mining Corporation wants to diversity its operations. Some recent financial information for the company is shown here:.Stock Price $50; Number of
The Metallica Heavy Metal Mining Corporation wants to diversity its operations. Some recent financial information for the company is shown here:.Stock Price $50; Number of shares $30,000; Total assets $8,700,000; Total Liabilities $3,600,000. Net Income $600,000. the company is considering an investment that has the same PE ratio as the firm. The cost of the investment is $640,000 and it will be financed with a new equity. the ROE on the investmnet would have to be ??? percent? If we wanted a price after the offering to be $50 per share (assume the PE ratio remains constant) and the NPV of investment would be ?
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