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KMS corporation has assets of $600 million, $60 million of which are cash. It has debt of $150 million. Suppose that KMS decides to initiate
KMS corporation has assets of $600 million, $60 million of which are cash. It has debt of $150 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 16.4%, to what amount per year in perpetuity should it commit (assuming perfect capital market)
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