Question
A firm is expected to grow in perpetuity at a rate of 5%. If the current yearfree cash flow is 15 million, the cost of
A firm is expected to grow in perpetuity at a rate of 5%. If the current yearfree cash flow is
15 million, the cost of equity is 16%, after-tax cost of debt is 9% and the target debt to
equity ratio is 0.25,then what is the value of this firm today if the tax rate is 20%?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
16th edition
125927716X, 978-1259687969, 1259687961, 978-1259277160
