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x Y Z Corporation is considering acquiring ABC Company. x Y Z estimates that the acquisition will generate additional free cash flows of 1 .
Corporation is considering acquiring ABC Company. estimates that the acquisition will generate additional free cash flows of million dollars per year, in perpetuity. XYZ Corporation's cost of capital is If ABC Company is currently valued at $ million, what is the maximum price Corporation should be willing to pay for ABC Company to ensure the acquisition is valueaccretive? If your answer is $ million, write
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