Fortune Real Estate, Inc., expects to earn $71 million per year in perpetuity if it does...

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Fortune Real Estate, Inc., expects to earn $71 million per year in perpetuity if it does not undertake any new projects. The firm has an opportunity to invest $16 million today and $5 million in one year in real estate. The new investment will generate annual earnings of $11 million in perpetuity, beginning two years from today. The firm has 15 million shares of common stock outstanding, and the required rate of return on the stock is 12 percent. Land investments are not depreciable. Ignore taxes. (Please note that no marks will be awarded if there are no workings provided in your answer.) Required: 1. What is the per-share stock price if the firm ignores the investment? (1 mark) 2. What is the NPVGO per-share if the firm undertakes the investment? (2 marks) 3. What is the per-share stock price if the firm undertakes the investment? (1 mark) Fortune Real Estate, Inc., expects to earn $71 million per year in perpetuity if it does not undertake any new projects. The firm has an opportunity to invest $16 million today and $5 million in one year in real estate. The new investment will generate annual earnings of $11 million in perpetuity, beginning two years from today. The firm has 15 million shares of common stock outstanding, and the required rate of return on the stock is 12 percent. Land investments are not depreciable. Ignore taxes. (Please note that no marks will be awarded if there are no workings provided in your answer.) Required: 1. What is the per-share stock price if the firm ignores the investment? (1 mark) 2. What is the NPVGO per-share if the firm undertakes the investment? (2 marks) 3. What is the per-share stock price if the firm undertakes the investment? (1 mark)