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Please explain how to solve the following A firm has a debt-to-value ratio of 40%, a cost of equity of 14%, and an after-tax cost
Please explain how to solve the following
A firm has a debt-to-value ratio of 40%, a cost of equity of 14%, and an after-tax cost of debt of 5.5%. It plans to launch a new product that will produce cash flows of $398,000 next year and $211,000 in year 2. If this project is about as risky as the firms existing assets, what is the present value of the project?
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