Myox Labs announces that it is pulling one of its leading drugs from the market, owing to

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Myox Labs announces that it is pulling one of its leading drugs from the market, owing to the potential side effects associated with the drug. As a result, its future expected free cash flow will decline by $85 million per year for the next 10 years. Myox has 50 million shares outstanding, no debt, and an equity cost of capital of 8%. If this news came as a complete surprise to investors, what should happen to Myox’s stock price upon the announcement?

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Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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