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ABC investment bank introduced a new financial instrument Genzyme. Investors expect Genzyme to provide zero net cashflows for the next 5 years. In the 6

ABC investment bank introduced a new financial instrument Genzyme. Investors expect Genzyme to provide zero net cashflows for the next 5 years. In the 6th year, Genzyme is expected to have cashflows of Rs 100 million, which is then expected to grow at a constant rate of 5% forever. If investors require a 10% rate of return, what is the current value of Genzyme? (Assume all cashflows occur at the end of the year.)

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