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The company you want to acquire has the following cash flows for the next five years. Assume that the cost of equity is 1 6

The company you want to acquire has the following cash flows for the next five years. Assume that the cost of equity is 16% and the firm can borrow long term at 12%(Tax rate for the firm is 40%). The current book value of equity is $1200 and the book value of debt outstanding, which sells at par value, is $300.(Market is not in equilibrium.)
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