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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 | $ | 80 | |
Number of shares | 40,000 | ||
Total assets | $ | 7,600,000 | |
Total liabilities | $ | 2,200,000 | |
Net income | $ | 440,000 | |
MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $800,000, and it will be financed with a new equity issue. |
what will the ROE on the investment have to be?
if we want the price after the offering to be $80 per share( assume the PE ration remains constant ), and the NPV would be?
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