What would the new share price be

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Reference no: EM131854343

Andover, Inc. had a current share price of $58, and the firm had 1,000,000 shares of stock outstanding. The company is considering an investment project that requires an immediate $25,000,000 investment but will produce a stream of cash flow of $11,000,000 each year over the next 3 years then close. There is no salvage value. If Andover invests in the project, what would the new share price be? Andover's cost of capital is 10%. (Hint: consider how the project NPV affects the stock price)

Reference no: EM131854343

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