What is the current market-to-book ratio

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Reference no: EM131956904

The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here:

Stock price $ 74

Number of shares 40,000

Total assets $ 8,200,000

Total liabilities $ 4,000,000

Net income $ 700,000

MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $800,000, and it will be financed with a new equity issue. The return on the investment will equal MHMM’s current ROE.

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.)

Current book value $ per share

per share New book value $ per share

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., 32.1616.)

Current market-to-book

New market-to-book

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

Current earnings per share $

New earnings per share $

What is the NPV of this investment? (Negative amount 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.)

NPV $

Does accounting dilution occur here?

Yes

Does market value dilution occur here?

Yes

Reference no: EM131956904

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