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KMS corporation has assets of $350 million, $35 million of which are cash. It has debt of $116.5 million. Suppose that KMS decides to initiate
KMS corporation has assets of $350 million, $35 million of which are cash. It has debt of $116.5 million. Suppose that KMS decides to initiate a dividend, but it wants the present value of payout to be $8.8 million. If its cost of equity capital is 9.7%, to what amount per year in perpetuity should it commit? Please provide step by step answer
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