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Wyatt Oil is considering an investment in a new project with an unlevered cost of capital of 11%. Wyatt's marginal corporate tax rate is 35% and its debt cost of capital is 6%. The project has free cash flows of $25 million per year which are expected to decline by 3% per year.
-If Wyatt adjusts its debt continuously to maintain a constant debt-equity ratio of 50%,then the value of this new project is closest to:
Obligations
Duties or commitments imposed by law, contract, or moral responsibility.
Majority Of States
Refers to more than half of the 50 states in the United States.
Duty Of Care
A legal obligation to ensure the safety or well-being of others, which can arise in various contexts such as professional services or public activities.
Honest Error
A mistake made without malicious intent or knowledge of its falsehood, often considered in legal and ethical considerations.
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