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An all equity financed project with following information: Initial capital spending is $450 Million; The project will create perpetual $180 Million unlevered after-tax cash flow
An all equity financed project with following information:
Initial capital spending is $450 Million; The project will create perpetual $180 Million unlevered after-tax cash flow every year; The cost of unlevered discount rate is 19% Corporate tax is 29% .
If firm decides to borrow $270 Million at 8% borrowing rate for this project. What is annual levered cash flow from equity holders' perspective?
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