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You are managing a firm that pays corporate taxes on its net income (T = 0.375) but operates in an otherwise perfect capital market environment.
You are managing a firm that pays corporate taxes on its net income (T = 0.375) but operates in an otherwise perfect capital market environment. Your firm has a perpetual expected cash inflow each year () of $150, which can be larger or smaller, but is never less than $50 per year. Your cost of capital is 12%. What is your net worth?
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