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What Is the Value of the Following Firm Where: •

question 40

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What is the value of the following firm where: • free net cash flows are expected to be a constant £3m per year to infinity;
• cost of debt capital after tax is 6 per cent per annum;
• the cost of equity capital is 14 per cent per annum;
• half the firm's capital is debt and half is equity (market values) ?


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