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.