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Johnson and Johnson forecasts year-end annual USD3 million free cash flows into perpetuity from an investment of USD 14 million in Turkey. If the required

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Johnson and Johnson forecasts year-end annual USD3 million free cash flows into perpetuity from an investment of USD 14 million in Turkey. If the required return on this investment is 15% and the company's WACC is 19%, what must the probability of expropriation in year 6 have to be at a minimum before the investment is not financially viable? If expropriation occurs it will occur just before the year 6 cash Intlow or not at all, Johnson and Johnson has not applied for political risk insurance anol O a. 60.341% b. 69.392% O c. 30.000% O d. 27.045% O e 32.184%

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