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Prokter and Gramble (PG) currently has $25 billion outstanding debt. PG has a cost of equity capital of 7 percent and a cost of debt

image text in transcribed Prokter and Gramble (PG) currently has $25 billion outstanding debt. PG has a cost of equity capital of 7 percent and a cost of debt capital of 4\%. PG's tax rate is 30 percent. PG is expected to have EBIT of $9 billion at the end of this year. If PG's cash flows to equity holders grow at 3% in perpetuity, what is the market value for PG's equity? A. $100 billion B. $105 billion C. $140 billion D. $165 billion

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