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You are given the following information on Company QRS: - It has net debt of 300m, with a debt cost of capital of 6% -

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You are given the following information on Company QRS: - It has net debt of 300m, with a debt cost of capital of 6% - It has total equity of 300m, with an equity cost of capital of 10% Company QRS is considering the acquisition of another firm in its industry. The acquisition is expected to increase QRS's free cash flow by $3.8 million the first year, and this contribution is expected to grow at a rate of 3% per year from then on. QRS has negotiated a purchase price of $80 million. After the transaction, QRS will adjust its capital structure to maintain its current debt-equity ratio. If the acquisition has similar risk to the rest of QRS, what is the value of this deal

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