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Firms A and B are competitors. Both have similar assets and business risks and are all - equity firms. Firm A has after - tax

Firms A and B are competitors. Both have similar assets and business risks and are all-equity firms. Firm A has after-tax cash flow of $20,000 per year forever and firm B has after-tax cash flow of $150,000 per year forever. If the two firms merge, the perpetual after-tax cash flow will be $179,000. If the appropriate discount rate is 15% what is the MOST B will pay for A?
a. $193,333
b. $9,000
c $20,000
d. $60,000
e. $133,333

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