A firm is considering a project that will generate perpetual after - tax cash flows of $
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Question:
A firm is considering a project that will generate perpetual
aftertax cash flows of $ per year beginning next year. The
project has the same risk as the firms overall operations and must
be financed externally. Equity flotation costs percent and debt
issues cost percent on an aftertax basis. The firms DE ratio
is What is the most the firm can pay for the project and still
earn its required return? Do not round intermediate calculations.
Round your final answer to the nearest whole dollar. Maximum the
firm can pay
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