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Firm ABC's projected cash flows are as follows Year 2 4 and 4+ 3,500 Grow at g-1% forever CF 6,000 10,000 We can choose one
Firm ABC's projected cash flows are as follows Year 2 4 and 4+ 3,500 Grow at g-1% forever CF 6,000 10,000 We can choose one of the following three capital structure plans Debt 30% 40% 70% Equity 70% 60% 30% Credit Rating Plan A Plan B Plan C The credit spread is as follows Credit Rating Credit Spread 0.50% 1% 3% The firm's unlevered beta IS 1.2. tax rate is 21%, and market return is 13% The 10-year Treasury bond with par value $100 annual What is the lowest possible WACC What is the highest possible firm value Hint: use the treasury bond to calculate the risk-free rate coupon rate 3.125%, 10-year to maturity, is selling at $85. (two decimals) (two decimals) the cost of debt-risk-free ratecredit spread
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