If andover invests in the project what would the new share


Andover, Inc. had a current share price of $58, and the firm had 1,000,000 shares of stock outstanding. The company is considering an investment project that requires an immediate $25,000,000 investment but will produce a stream of cash flow of $11,000,000 each year over the next 3 years then close. There is no salvage value. If Andover invests in the project, what would the new share price be? Andover's cost of capital is 10%. (Hint: consider how the project NPV affects the stock price)

Request for Solution File

Ask an Expert for Answer!!
Financial Management: If andover invests in the project what would the new share
Reference No:- TGS02649844

Expected delivery within 24 Hours