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What is the current market-to-book ratio and market-to-book

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Reference no: EM132887629

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 30,000

Total assets$9,800,000

Total liabilities$4,700,000

Net income$420,000

The company 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 the company's current ROE.

Question 1: What is the current book value per share and the book value per share with the investment?

Question 2: What is the current market-to-book ratio and the market-to-book ratio with the investment?

Reference no: EM132887629

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