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 $
The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here: |
Stock price | $ | 50 | |
Number of shares | 25,000 | ||
Total assets | $ | 6,100,000 | |
Total liabilities | $ | 3,800,000 | |
Net income | $ | 450,000 |
MHMM 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.(Do not round intermediate calculations.) |
The ROE on the investment would have to bepercent(Round your answer to 2 decimal places (e.g., 32.16).)if we wanted the price after the offering to be $50 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)doesdoes notoccur in this case. Market value dilution(Click to select)does notdoesoccur in this case. |
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