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Problem:

Assume another company had the following information related to the free cash flows to equity holders in amount of $1.5 million a year from now and also growing at the same rates as given above. The cost of equity is 12%.

Required:

Question: What will be the value of equity of the firm? What will be the value of the company if it has a debt of $7.5 million?

Note: Please provide equation and explain comprehensively and give step by step solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148094

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