Your firm Dier-Streits is in the plumbing business. Lately things seem to be going down the tubes. Your firm's total asset value is estimated to be about 7 million, but debt payments of 8 million are due at the end of the year. You are considering a job that would require massive overtime but would create an NPV of -$3 million or $5 million with probabilities of 0.7 and 0.3, respectively. a. What is the expected NPV of this project? b. From a total firm value perspective, should you invest in this project? c. From purely a shareholder's perspective, should you invest in this project?

Suppose an investor in the firm Diamax International is unhappy about its dividend policy. She currently owns 25% of Diamax and it currently pays no dividends. The investor would like to create a dividend of $3.00 per share. She has decided to sell shares of Diamax in order to accomplish this. What number of shares must she sell if Diamaxs common stock is currently trading at $41.37 and there are one million shares outstanding?