White plc has net assets whose net present value is £5m. This includes cash of £1m, which the directors have identified could be invested in a project whose anticipated inflows have a present value of £2m. Assuming that White plc is financed by 1m ordinary shares (no gearing) and that the investment is undertaken and no dividend paid, the value of each share should be £(5 + 2 − 1)m/1m = £6. If, instead of making the investment, the £1m cash were used to pay a dividend, each share would be worth £(5 − 1)m/1m = £4 and the holder of one share would have £1 (the dividend) in cash.