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KMS corporation has assets of $ 500 million, $ 50 million of which are cash. It has debt of $ 200 million. Suppose that KMS
KMS corporation has assets of $ 500 million, $ 50 million of which are cash. It has debt of $ 200 million. Suppose that KMS decides to initiate a dividend, but it wants the present value of payout to be $ 20 million. If its cost of equity capital is 10.0 %, to what amount per year in perpetuity should it commit?
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