What is the NPV of this investment

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Reference no: EM132066617

The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is show 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 if 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 will happen to the book value per share, the market value per share, and the EPS? What is the NPV of this investment? Does accounting dilution take place? Does market value dilution occur?

Reference no: EM132066617

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