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suppose good year tire is considering divesting one of its manufacturing plants. the plant is expected to generate free cash flows of 1.67 million per
suppose good year tire is considering divesting one of its manufacturing plants. the plant is expected to generate free cash flows of 1.67 million per year growing at a rate of 2.4% per year. good year has an equity cost of capital of 8.5%, a debt cost of capital of 7.1%, a marginal corporate tax rate of 35%, and a debt - equity ratio of 2.8 if the plant has average risk and good year plans to maintain a constant debt-equity ratio, what after tax amount must it receive for the plant for the divestiture to be profitable?
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