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A firm has the following capital structure: market capitalization: $ 8 0 0 m , debt: $ 6 0 0 m , no cash. 1

A firm has the following capital structure: market capitalization: $

800

,

debt: $

600

,

no cash.

1

P: $

60

,

50

: $

40

.

If climate policy leads to a

50 %

drop in P

50,

what is the new enterprise value?

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