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Suppose a firm projects a $ 5 million perpetuity from an investment of $ 2 0 million in Spain. If the required return on this

Suppose a firm projects a $5 million perpetuity from an investment of $20 million in Spain. If the required return on this investment is 20%, how large does the probability of expropriation in year 4 have to be before the investment has a negative NPV? The correct answer for this is 34.5%.

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