User Account

All Pages

The npv of the investment

Assignment Help Financial Management
Reference no: EM131145834

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


Stock price $ 50
Number of shares
20,000
Total assets $ 8,400,000
Total liabilities $ 2,800,000
Net income $ 420,000

MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $600,000, and it will be financed with a new equity issue. (Do not round intermediate calculations.)

The ROE on the investment would have to be percent (Round your answer to 2 decimal places (e.g., 32.16).) if we wanted the price after the offering to be $50 per share (assume the PE ratio remains constant), and the NPV of the investment would be $ (Leave no cells blank - be certain to enter "0" wherever required.). Accounting dilution (Click to select)does not does occur in this case. Market value dilution (Click to select)does not does occur in this case.

Reference no: EM131145834

Questions Cloud

Discuss what are the lessons to be learned about motivation : Using three motivation theories/frameworks covered in this course, discuss what are the lessons to be learned about motivation from the practices of NUMMI
What is your own reservation wage : Relative to your reservation wage at the time you accept each job, which job pays more: your first one or the one you expect to have in 10 years?
What effect would this have on the real wage in medium run : Suppose that for given labor-market conditions [the variable you identified in part (b)], worker bargaining power throughout the economy increases. What effect would this have on the real wage in the medium run? in the short run? What determines t..
What type of tax rate structure does the us tax system apply : What type of tax rate structure does the U.S. tax system apply? What are the individual tax forms, and what factors are used to determine which one to use? What is taxable income, and how is it determined?
The npv of the investment : if we wanted the price after the offering to be $50 per share , and the NPV of the investment would be $.- Accounting dilution does not does occur in this case.
What would you estimate the scrap rate : What would you estimate the scrap rate to be using a 6-month moving average? Using that scrap rate, what would be your material estimate for a new contract for the item when the material required for the finished product is $90,000?
Why is there unemployment in the economy : Given your answer to part (a), why is there unemployment in the economy? (What would happen to real wages if the unemployment rate were equal to zero?)
Compute the variable overhead rate variance : Compute the variable overhead rate variance. Compute the variable overhead efficiency variance. Provide the accounting entry for the overhead rate and efficiency variances.
Which of the following actions should you take : Your maintenance chief has reported that a mechanic you hired from another regional airline told him that the other airline did a lot of "pencil maintenance." Which of the following actions should you take

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd