Question: Fischer, Incorporated, has 2 5 0 , 0 0 0 shares of stock outstanding, $ 4 0 0 , 0 0 0 in perpetual annual

Fischer, Incorporated, has 250,000 shares of stock outstanding, $400,000 in perpetual annual earnings, and a discount rate of 16 percent. The firm is considering a new project that has initial costs of $350,000 and annual perpetual cash flows of $60,000. How many new shares must be issued to fund the new project? Ignore taxes.

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