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Hope Company is taken to court by its creditors. Hope is fighting for survival and presented its reorganization plan. Its plan shows that its expected FCF next year is 250,000 and will grow at a constant rate of 5% per year. Its cost of capitol is 15%. If its assets are sold today and it is liquidated, they can fetch 2.8 million. If you were the bankruptcy judge, will you grant Hope a reorganization plan or will you liquidate? What should its minimum growth rate to grant reorganization?

Financial Management, Finance

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