If a Project Can Be Financed with Riskless Debt,then the Share's

question 2

Multiple Choice

If a project can be financed with riskless debt,then the share's intrinsic value will be equal to:

• A)(Value of current assets + NPV of new project)\(\div\) Number of shares.
• B)(Value of original assets + NPV of new project)\(\div\) Number of shares.
• C)(Value of current assets - NPV of new project)\(\div\) Number of shares.
• D)(Value of original assets - NPV of new project)\(\div\) Number of shares.

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Definitions:

Merchandise

Products that are purchased and sold during business activities.

Cash Balance

is the amount of liquid funds that a company or individual possesses at any given time, available for immediate use.

Receivables

Financial obligations of customers to a company for merchandise or services already supplied or consumed, but for which payment is still outstanding.

Taxes

Mandatory financial charges or levies imposed by a government on individuals, corporations, and other entities to fund government spending and various public expenditures.