Biotech expects to earn 2 million per year in perpetuity if, Financial Management

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Biotech expects to earn 2 million per year in perpetuity if

BioTech expects to earn $2 million per year in perpetuity if it undertakes no new investment opportunities. There are 100,000 shares outstanding. The firm will have an opportunity at Year 1 to spend $2 million on a new project. The new project will increase earnings in every subsequent period by $200,000. The discount rate is 10%. What is the value per share before and after deciding to accept the project?

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Financial Management: Biotech expects to earn 2 million per year in perpetuity if

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Financial Management: Biotech expects to earn 2 million per year in perpetuity if

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