Refer back to the Hub Power project in Section 25.7. There were many other ways that the
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Refer back to the Hub Power project in Section 25.7. There were many other ways that the Hubco project could have been financed. For example, a government agency could have invested in the power plant and hired National Power to run it. Alternatively, National Power could have owned the power plant directly and funded its cost by a mixture of new borrowing and the sale of shares. What do you think were the advantages of setting up a separately financed company to undertake the project?
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Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
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