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Western Lumber Company expects to generate net earnings (NE) of $ 4.25 MM and this NE is expected to grow at a constant rate of
Western Lumber Company expects to generate net earnings (NE) of $ 4.25 MM and this NE is expected to grow at a constant rate of 4% per year thereafter. The company has an equity cost of 10% and a debt cost of 6%. Corporate tax rate for Western Lumber is 35% Western Lumber always maintains a debt to equity ratio of 0.40. 19. The PV of this infinite NE for Western Lumber is: O a. $ 80 MM O b. $ 85 MM O c. $ 90 MM O d. $ 95 MM O e. $ 100 MM
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