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The annual after-tax free cash flow from the acquisition by Pacific Care of Universal Health is projected to be $25 million. These flows are expected
The annual after-tax free cash flow from the acquisition by Pacific Care of Universal Health is projected to be $25 million. These flows are expected to continue for 10 years. No value is placed on cash flows beyond 10 years. If the appropriate risk-adjusted discount rate for the merged firm is 16.25%, what is the maximum amount Pacific Care should pay to acquire Universal Health?
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