Home / Questions / The Metallica Heavy Metal Mining (MHMM) Corporation wants todiversify its operations. Some
The Metallica Heavy Metal Mining (MHMM) Corporation wants todiversify its operations. Some recent financial information for thecompany is shown here:
MHMM is considering an investment that has the same PE ratio asthe firm. The cost of the investment is $800,000, and it will befinanced with a new equity issue. The return on the investment willequal MHMM’s current ROE.
What is the current book value per share? The new book value pershare? (Do not round intermediate calculations and roundyour answers to 2 decimal places, e.g., 32.16.)
$ per share
New book value
What is the current market-to-book ratio? The new market-to-bookratio? (Do not round intermediate calculations and roundyour answers to 4 decimal places, e.g., 32.1616.)
What is the current EPS? The new EPS? (Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)
Current earnings pershare
New earnings pershare
What is the NPV of this investment? (Negative amountshould be indicated by a minus sign. Do not round intermediatecalculations and round your answer to the nearest whole dollaramount, e.g., 32.)
Does accounting dilution occur here?
Does market value dilution occurhere?
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