What will happen to the stock price

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Reference no: EM132007178

Suppose a firm has a discount rate of .12. It invests 20 in year 1 on a project that pays 11 each year for the following 2 years. The project is equity-financed and in the same line of business as the firm's existing business.

What will happen to the stock price? Referring to the concept of net present value, explain your answer.

Reference no: EM132007178

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