F3 Exam Dumps | A company has: * 10 million $1 ordinary shares in issue * A current share price of $5.00 a share * A

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Question 178/182

A company has:
* 10 million $1 ordinary shares in issue
* A current share price of $5.00 a share
* A WACC of 15%
The company holds $10 million in cash. No interest is earned on this cash.
It will invest this in a project with an expected NPV of $4 million.
In a semi-strong efficient stock market, which of the following is the most likely share price immediately after the announcement of the new investment?

A. $6.80

B. $5.40

C. $6.40

D. $5.30

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Question 178/182

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