Your firm is using project finance to capitalize an upcoming $100,000,000 project for the company, which...

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Your firm is using project finance to capitalize an upcoming $100,000,000 project for the company, which will use 30% equity and 70% nonrecourse debt. The project generates $6.5m in equity free cash flows in its first year, and that figure will grow at 1.5% per year thereafter. Given an asset beta of 1.25, use a project finance approach to estimate the value of the equity in the project, and give that number in millions Your firm is using project finance to capitalize an upcoming $100,000,000 project for the company, which will use 30% equity and 70% nonrecourse debt. The project generates $6.5m in equity free cash flows in its first year, and that figure will grow at 1.5% per year thereafter. Given an asset beta of 1.25, use a project finance approach to estimate the value of the equity in the project, and give that number in millions

Answer rating: 100% (QA)

To estimate the value of equity in the project we can use the following formula ... View the full answer