Question: Problem 5 (7 Marks) Constor Limited is an all equity firm, has 1,000,000 common shares outstanding and has earnings per share (EPS) of $3.00. Its

Problem 5 (7 Marks) Constor Limited is an all equity firm,

Problem 5 (7 Marks) Constor Limited is an all equity firm, has 1,000,000 common shares outstanding and has earnings per share (EPS) of $3.00. Its tax rate is 25%. The company is considering making a $4 million investment which will increase EBIT by 20%. Its plan is to issue shares at their current market value of $20. a. Assuming everything else remains the same, what is the expected share price? Show your work

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