Question
The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here: Stock price $74
The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here:
Stock price $74
Number of shares30,000
Total assets $9,800,000
Total liabilities $4,700,000
Net income $420,000
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 issue. The return on the investment will equal the company's current ROE.
What is the current book value per share and the book value per share with the investment? (do not round up progressing calculations, 2 decimals)
Current ?
New ?
What is the current market-to-book ratio and the market-to-book ratio with the investment?(do not round up progressing calculations, 2 decimals)
Current?
New?
What is the current EPS and the EPS with the investment? (do not round up progressing calculations, 2 decimals)
Current?
New?
What is the NPV of this investment? (do not round up progressing calculations, 2 decimals)
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