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A company is 30% financed by risk-free debt. The risk-free interest rate is 10%, the expected market risk premium is 8%, and the beta of
A company is 30% financed by risk-free debt. The risk-free interest rate is 10%, the expected market risk premium is 8%, and the beta of the company's common stock is 0.2 . What is the aftertax WACC, assuming that the company pays tax at a 40% rate? Consider there is a project with the average risk of the company's assets, and that it will generate USD 5 million income every year from years 1 to 3 , after an initial investment of USD 3 million. What is the NPV of this project
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