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In a perfect capital market, suppose Orange Company has only one project which is expected to bring a cash flow of $55,000 next year, with

In a perfect capital market, suppose Orange Company has only one project which is expected to bring a cash flow of $55,000 next year, with an unlevered cost of equity of 10%. If the company borrows $20,000 at 6% to make the investment, what is expected return to equity holders at the end of year 1?

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