How Much Will a Firm Need in Cash Flow Before

question 91

Multiple Choice

How much will a firm need in cash flow before tax and interest to satisfy debtholders and equityholders if the tax rate is 40%,there is $10 million in common stock requiring a 12% return,and $6 million in bonds requiring an 8% return?

• A) $1,392,000
• B) $1,488,000
• C) $2,480,000
• D) $2,800,000

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