Birds and More Is Considering a Project Which Requires the Purchase

question 40

Multiple Choice

Birds and More is considering a project which requires the purchase of $164,000 of fixed assets. The net present value of the project is $4,500. Equity shares will be issued as the sole means of financing this project. The price-earnings ratio of the project equals that of the existing firm. What will the new market value per share be after the project is implemented given the following current information on the firm?

• A)$20.68
• B)$20.72
• C)$20.80
• D)$20.95
• E)$21.10

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Definitions:

Political Power

The capacity or ability to direct or influence the behavior of others or the course of events through political means.

Collective Behavior

The actions, thoughts, and feelings of a loosely organized group of people that are not governed by formal rules but are driven by a common mood or interest.

Early Theories

Early theories in various disciplines refer to foundational ideas or hypotheses proposed to explain phenomena, which have paved the way for subsequent research and development.

Collective Behavior

The spontaneous, unstructured, and temporary activities and actions of a group of people responding to an event, situation, or phenomenon.