A company has earnings per share of 2 and it has 2 million, Ask an Expert

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A company has earnings per share of $2 and it has 2 million shares outstanding. The company is going to undertake a project which will require investment of 1million now, and another 1.1 million a year from today. THe project will start to provide cash inflows from the end of year 2. THe cash inflow will be $600.000 forever. The required rate of return is 10%. What is the share price of the stock today? (Hint: use an NPVGO approach) Excel is not allowed.

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Financial Management, Finance

Category:- Financial Management
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