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Assume your firm net cash flows for the next three years are projected at $72,000, $78,000, and $84,000, respectively. After that the cash flows are
Assume your firm net cash flows for the next three years are projected at $72,000, $78,000, and $84,000, respectively. After that the cash flows are expected to increase by 3.2 percent annually. The aftertax cost of debt is 6.2 percent and the cost of equity is 11.4 percent. What is the value of your firm if it is financed with 40 percent debt and 60 percent equity?
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