Problemgenoa ltd is about to start a new project that will, Ask an Expert

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Problem:

Genoa ltd is about to start a new project that will have a Net Present Value of $100 million. The stock currently trades at $105 and there are 2,000,000 shares outstanding. In order to start the project the company needs to raise $400,000,000 in new equity, by issuing 3,000,000 new shares that will be ordered to the public.

Required:

Question: What will be the stock price after the announcement that the company will immediately undertake such project and issue new equity? (Assume perfect markets and no issuance costs)

Note: Provide support for your underlying principle.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91174438

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