An all-equity fi rm has 100,000 shares outstanding worth $10 each. The fi rm is considering a project that requires an investment of $400,000 and has an NPV of $50,000. The company is also considering...

An all-equity fi rm has 100,000 shares outstanding worth $10 each. The fi rm is considering a project that requires an investment of $400,000 and has an NPV of $50,000. The company is also considering fi nancing this project with a new issue of equity. a. What is the price at which the fi rm needs to issue the new shares so that the existing shareholders are indifferent to whether the fi rm takes on the project with this equity fi nancing or does not take on the project? b. What is the price at which the fi rm needs to issue the new shares so that the existing shareholders capture the full benefi t associated with the new project?