The Down Under is an all-equity firm with 210,000 shares of stock outstanding. The book value per share is $23 and the market value per share is $46. The current net income is $310,800. An expansion project will cost $1.1 million. Assume the price-earnings ratio remains constant. What must be the new total net income of the firm if the market price per share is to remain at $46?

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To keep the market price per share at 46 while taking on a new expansion project costing 11 million ... View the full answer