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a. 5% revenue growth per annum (versus 4% growth) in each of the next five years and improve the operating margin to 12% (versus 10%).

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a. 5% revenue growth per annum (versus 4% growth) in each of the next five years and improve the operating margin to 12% (versus 10%). b. Assume part a and that the division can be sold at 7.5x EBITDA in five years. c. Assume part a and part b and that debt financing equal to 6.0x forward EBITDA can be obtained. Assume that all cash available to pay debt each year (i.e., residual cash ow) is used to pay down the LED debt and that, after ve years, the rm will revert to an all equity firm. What are some of the advantages and risks of using leverage to nance the investment

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