Assuming an efficient capital market

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TK Ltd is considering undertaking a project with the following cash flow patterns. Year 1 2 3 4 5 NCF Sh’000 (3000) (3000) 300 6500 8400 The cost of capital is 12%. The company’s current market price per share is sh.164.50 before the decision to undertake the project is made. The company has 1,000,000 ordinary shares in issue. Required: Assuming an efficient capital market; find the company’s market value per share immediately the decision to undertake the project is made.

Reference no: EM131522720

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