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Suppose you borrow $53354.97M when financing a gym with a cost of $91495.24M. You expect to generate a cash flow of $47649.23M at the end
Suppose you borrow $53354.97M when financing a gym with a cost of $91495.24M. You expect to generate a cash flow of $47649.23M at the end of the year if demand is weak, $98126.78M if demand is as expected and $114913.96M if demand is strong. Each scenario is equally likely. The current risk-free interest rate is 5.91% (risk of debt) and there's a 13.07% risk premium for the risk of the assets. What should the value of the equity be?
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