Assume MyPharm Corp. is announcing that one of its licensed medications has been successfully tested to be effective in the treatment of the Corona Virus. As a result, its future free cashflow is expected to increase by EUR 500 mln over the next 3 years. MyPharm has currently 80 mln share outstanding, no debt and a cost of equity of 7%. This news come as a surprise to the market. What should happen to the share price?
Assume MyPharm Corp. is announcing that one of its licensed medications has been successfully tested to be effective in the treatment of the Corona Virus. As a result, its future free cashflow is expected to increase by EUR 500 mln over the next 3 years. MyPharm has currently 80 mln share outstanding, no debt and a cost of equity of 7%. This news come as a surprise to the market. What should happen to the share price?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Assume MyPharm Corp. is announcing that one of its licensed medications has been successfully tested to be effective in the treatment of the Corona Virus. As a result, its future free cashflow is expected to increase by EUR 500 mln over the next 3 years. MyPharm has currently 80 mln share outstanding, no debt and a
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