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Omicron Industries' Market Value Balance Sheet ($ Millions) and Cost of Capital Assets Liabilities Cost of Capital Cash 0 Debt 200 Debt 6% Other Assets
Omicron Industries' Market Value Balance Sheet ($ Millions) and Cost of Capital
| Assets | Liabilities | Cost of Capital | |||||
| Cash | 0 | Debt | 200 | Debt | 6% | ||
| Other Assets | 500 | Equity | 300 | Equity | 12% | ||
| c | 21% |
Omicron Industries' New Project Free Cash Flows (Millions)
| Year | 0 | 1 | 2 | 3 |
| Free Cash Flows | ($100) | $40 | $50 | $60 |
Assume that this new project is of average risk for Omicron and that the firm wants to hold constant its debt to equity ratio. The unlevered value of Omicron's new project is
Use the information for the question(s) below. Omicron Industries' Market Value Balance Sheet (\$ Millions) and Cost of Capital Omicron Industries' New Proiect Free Cash Flows (Millions) Assume that this new project is of average risk for Omicron and that the firm wants to hold constant its debt to equity ratio. The unlevered value of Omicron's new project is closest to: $126 million. \$25 million. $96 million. $124 millionStep by Step Solution
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