11. Dilution,,The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here:,,,Stock price $73,Number of shares 45,000,Total assets $6,500,000,Total liabilities $2,600,000,Net income $630,000,,MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $1,100,000, and it will be financed with a new equity issue. The return on the investment will equal MHMM’s current ROE.,,a. What will happen to the book value per share?,b. What is the market value per share?,c. What is the EPS?,d. What is the NPV of this investment?,e. Does dilution take place?,,
Regent Papers is a library of common essays on high school, college, undergraduate and postgraduate topics. We have collected top papers from various institution, students and professors. The papers are based on common essay topics in all subjects.