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A new business is expected to generate a one-time free cash flow of $24,000 in one year and an expected return of 20%. The business
A new business is expected to generate a one-time free cash flow of $24,000 in one year and an expected return of 20%. The business will be financed with 40% debt and 60% equity. In a perfect capital market, what is the amount of debt and equity capital the business is able to raise today? Debt =$8,000; Equity =$12,000 None of the given choices Debt =$9,600; Equity =$14,400 Debt =$4,800; Equity =$19,200
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