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can you please write down the calculations and show where each formula come from? Thank you! c) As an alternative to financing the project entirely

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can you please write down the calculations and show where each formula come from? Thank you!

image text in transcribed

image text in transcribed

c) As an alternative to financing the project entirely with equity, the entrepreneur is considering financing part of the initial investment using debt. Suppose she finances 400,000 using risk-free debt, and the remaining 400,000 using equity. Show the cash flows at date 1 to the shareholders of the levered firm (i.e., the holders of the 'levered equity'), and to the holders of the debt. (5 marks) c) As an alternative to financing the project entirely with equity, the entrepreneur is considering financing part of the initial investment using debt. Suppose she finances 400,000 using risk-free debt, and the remaining 400,000 using equity. Show the cash flows at date 1 to the shareholders of the levered firm (i.e., the holders of the 'levered equity'), and to the holders of the debt. (5 marks) c) As an alternative to financing the project entirely with equity, the entrepreneur is considering financing part of the initial investment using debt. Suppose she finances 400,000 using risk-free debt, and the remaining 400,000 using equity. Show the cash flows at date 1 to the shareholders of the levered firm (i.e., the holders of the 'levered equity'), and to the holders of the debt

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