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Suppose that Rose Industries is considering the acquisition of anothe les is considering the acquisition of another firm in its industry for $100 million. The
Suppose that Rose Industries is considering the acquisition of anothe les is considering the acquisition of another firm in its industry for $100 million. The acquisition is expected to increase Rose's free cash flow by this contribution is expected to grow at a rate of 3% every yet crease Rose's free cash flow by $5 million the first year, and expected to grow at a rate of 3% every year there after. Rose currently maintains a quity ratio of 1. its marginal tax rate is 40%, its cost of debt rp is 6%, and its cost of equity E IS TO Rose Industries will maintain a constant debt-equity ratio for the acquisition. Given that Rose issues new debt of sso million initially to fund the acquisition, the total value of this acquisition. Suppose that Rose Industries is considering the acquisition of anothe les is considering the acquisition of another firm in its industry for $100 million. The acquisition is expected to increase Rose's free cash flow by this contribution is expected to grow at a rate of 3% every yet crease Rose's free cash flow by $5 million the first year, and expected to grow at a rate of 3% every year there after. Rose currently maintains a quity ratio of 1. its marginal tax rate is 40%, its cost of debt rp is 6%, and its cost of equity E IS TO Rose Industries will maintain a constant debt-equity ratio for the acquisition. Given that Rose issues new debt of sso million initially to fund the acquisition, the total value of this acquisition
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