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A national grocery chain, Fresh Foods, is also considering making an offer for Premier Pizza. The levered equity beta of the grocery chain is 0.9,
A national grocery chain, Fresh Foods, is also considering making an offer for Premier Pizza. The levered equity beta of the grocery chain is 0.9, its cost of debt is 4%, it is 43% debt-financed, and it has a 35% tax rate. What is the maximum price that Fresh Foods should be willing to pay for Premier Pizza? Assume that Fresh Foodss forecast for Premiers cash flows is the same as Boris and Isabelles
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