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Queennie Abatayo
on Dec 09, 2024

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You are considering a new project with a net present value of $25,000 and an initial cash outlay for fixed assets of $120,000. You are planning on funding this project by selling 2,500 new shares of stock. Currently, your firm has 45,000 shares of stock outstanding and a book value per share of $30. What will the new book value per share be if you accept this project?

A) $28.42
B) $28.95
C) $30.95
D) $31.47
E) $33.22

Net Present Value

The contrast between the present value of money received and the present value of money spent over a duration.

Fixed Assets

Long-term tangible assets that are used in the operating activities of a business and are not expected to be consumed or converted into cash in the short term.

Equity Shares

Shares of stock that represent ownership in a company, entitling the shareholder to a portion of the corporation's profits and assets.

  • Ascertain the effects of decisions related to financing, such as equity financing, on the book value and market value per share.
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Abigael TorresDec 12, 2024
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