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What is the current book value per share

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Question - The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here: Stock price $ 69 Number of shares 30,000 Total assets $ 8,700,000 Total liabilities $ 3,600,000 Net income $ 600,000 MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $640,000, and it will be financed with a new equity issue. The return on the investment will equal MHMM's current ROE.

Required -

a. What is the current book value per share? The new book value per share? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

b. What is the current EPS? The new EPS? (Do not round intermediate calculations and round your answers to 2 deplaces, e.g., 32.16.)

c. What is the current market-to-book ratio? The new market-to-book ratio? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.)

d. What is the NPV of this investment? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.)

Reference no: EM132777877

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