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Kohwe Corporation plans to borrow $46.3 million to finance a new investment. The firm will pay interest only on this loan each year, and it
Kohwe Corporation plans to borrow $46.3 million to finance a new investment. The firm will pay interest only on this loan each year, and it will maintain an outstanding balance of $46.3 million on the loan. Suppose thatKohwe's corporate tax rate is 25% and expected free cash flows are $9.5 million each year. Kohwe currently has 4.7 million shares outstanding, and it has no other assets or opportunities. Suppose the appropriate discount rate for Kohwe's future free cash flows is 8%. What is Kohwe's share price today if the investment is financed with debt
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