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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 | $ | 50 | |
Number of shares | 30,000 | ||
Total assets | $ | 6,300,000 | |
Total liabilities | $ | 3,300,000 | |
Net income | $ | 390,000 | |
MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $750,000, and it will be financed with a new equity issue. |
The ROE of the investment would have to be____________________percent.
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________________
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