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i know the optimal hedge ratio is 0.046 - but how do I get to that? 17. A firm can hedge its input prices, which

i know the optimal hedge ratio is 0.046 - but how do I get to that? image text in transcribed
17. A firm can hedge its input prices, which makes it cash flow in one year less risky. In one year, the firm's expected free cash flow is 10. It costs the firm 5x2 to hedge a fraction x of its input price risk. Given x, the cost of capital is given by rU=0.10.05x. What is the fraction x of the input price risk the firm should hedge to maximise the PV of the cash flows it receives next year

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