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An unlevered firm has 10,000 shares outstanding. Its free cash flow is a risk-free flat perpetuity. The firm is considering buying back half of its
An unlevered firm has 10,000 shares outstanding. Its free cash flow is a risk-free flat perpetuity. The firm is considering buying back half of its share with 50,000 perpetual risk-free debt. The risk-free interest rate is 6%. Assume this operation has no price impact and there is no corporate tax. If the firm breaks even in this operation, what is its free cash flow? A. 500
B. 1,500
C. 3,000
D. 6,00
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