Question
A firm is considering a project that will generate perpetual cash flows of $50,000 per year beginning next year. The project has the same risk
A firm is considering a project that will generate perpetual cash flows of $50,000 per year beginning next year. The project has the same risk as the firm's overall operations. If the firm's WACC is 12%, and its debt-to-equity ratio is 1.33, what is the most it could pay for the project and still earn its required rate of return?
A: $313,283
B: $375,094
C: $416,667
D: $554,167
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The Meaningful Money Handbook
Authors: Pete Matthew
1st Edition
0857196510, 978-0857196514
