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Aki Corporation currently has 70,000 shares outstanding with a market value of $840,000
Aki Corporation currently has 70,000 shares outstanding with a market value of $840,000. Recently the company considered a project which requires the purchase of a $375,000 equipment. The net present value of the project is $50,000. What will the new market value per share be after the project is implemented?
Expert Solution
Computation of New Market Value per Share be after the project is implemented:
Value per Share= Total Market Value/Total Number of Shares
Here,
Total number of market shares outstanding = 70,000
Total market value after the project= Net Present Value of Project + Outstanding Market Value = 50000 + 840000 = 890000
Value per Share = $890,000 / 70,000 = 12.71
So, New Market Value per Share be after the project is implemented is $12.71
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