If a project can be financed with riskless debt,then the share's intrinsic value will be equal to:

Question

Quizplus · Accepted Answer

The intrinsic value of shares increases with the addition of a new project's NPV (Net Present Value) to the original assets' value, divided by the number of shares. This is because the NPV represents the project's expected earnings in today's dollars, and adding it to the original assets' value reflects the total value creation from undertaking the new project. Financing with riskless debt does not change this calculation, as it assumes the project's financing cost is certain and does not add risk to the shareholders.

If a Project Can Be Financed with Riskless Debt,then the Share's