Homework Answers
Stock price after the announcement that the company will immediately undertake such project and issue new equity= (Market Value of Shares before New Issue + NPV + Market Value of New Shares Issued) / Total Number of Shares After New Issue
= (( $105 x 2 Million) + $100 Million + $ 400 Million) / (2 Million + 3 Million)
= ($710 million) / 5 million
= $142 per share
stock price after the announcement that the company will immediately undertake such project and issue new equity = $142 per share.
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