What is the price per share at which IWD represents a zero net present valueinvestment to ORG?

To determine the price per share at which IWD represents a zero net present value (NPV) investment to ORG, we'll follow these steps:

1. Break Down the Problem

• Identify the cash flows associated with the investment.
• Determine the discount rate.
• Calculate the present value of cash flows.
• Set the NPV equation to zero and solve for the price per share.

2. Relevant Concepts

The NPV of an investment is calculated using the formula: $NPV = \sum \frac{C_t}{(1 + r)^t} - Initial \, Investment$ where:

• $C_t$ = cash flow at time $t$
• $r$ = discount rate
• $t$ = time period

For the NPV to equal zero: $0 = \sum \frac{C_t}{(1 + r)^t} - P \cdot N$ where $P$ is the price per share and $N$ is the number of shares.

3. Analysis and Detail

• Determine cash flows $C_t$ from IWD.
• Choose an appropriate discount rate $r$ for ORG.
• Calculate the present value of the cash flows.

Assuming we have the necessary cash flow data and the discount rate, we substitute the values into the NPV equation to solve for $P$.

4. Verify and Summarize

• After calculating $P$, ensure it makes sense in the context of the investment’s cash flows.
• Verify that the calculated present values add up to the initial investment amount.

Final Answer

The price per share $P$ can then be computed once we have the specific cash flows and appropriate discount rates. If you provide more details on the cash flows or discount rates, I can assist you further in deriving the exact price per share that results in zero NPV.