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Firms unlevered required return on equity? A company has expected free cash flows in perpetuity of $10 million, a cost of equity capital of 10%,
Firms unlevered required return on equity?
A company has expected free cash flows in perpetuity of $10 million, a cost of equity capital of 10%, a cost of debt capital of 5%, and debt-to-equity ratio of 0.4. In perfect capital markets (no taxes), what is the firm's unlevered required return on equity? (rounded to the nearest 10th of a percent in percent terms - so for example 0.0876 would be " 8.8 ) Step by Step Solution
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