Question: Consider a firm whose enterprise value is $20 million. This enterprise value indicates the present value of all future cash flows of the firm. The

Consider a firm whose enterprise value is $20 million. This enterprise value indicates the present value of all future cash flows of the firm. The first cash flow is $4 million one year from now, and the subsequent cash flow will grow every year at 2% per year. What is the interest rate implied by the enterprise value?

16.0%

18.0%

20.0%

22.0%

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