You are a financial manager at ABC Corp. and are trying to assess the following project....

 

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You are a financial manager at ABC Corp. and are trying to assess the following project. The project will require a $250 million initial investment and will generate free cash flows in years 1-4 as shown in the table below. ABC Corp maintains a constant debt-to-enterprise value ratio of 25% and its current WACC is 13.6%. Assuming that ABC Corp. takes the project, how much additional debt must the firm issue in order to maintain a constant debt-to-enterprise value ratio of 25%? Select One. Free Cash Flows for New Project (in $ million) 1 0 2 3 Year FCF (in $ millions) (250.00) 100.00 150.00 100.00 OO 1. $52.5 million II. $13.12 million III. $75.62 million IV. $62.5 million OV. $32.54 million Save An 4 50.00 You are a financial manager at ABC Corp. and are trying to assess the following project. The project will require a $250 million initial investment and will generate free cash flows in years 1-4 as shown in the table below. ABC Corp maintains a constant debt-to-enterprise value ratio of 25% and its current WACC is 13.6%. Assuming that ABC Corp. takes the project, how much additional debt must the firm issue in order to maintain a constant debt-to-enterprise value ratio of 25%? Select One. Free Cash Flows for New Project (in $ million) 1 0 2 3 Year FCF (in $ millions) (250.00) 100.00 150.00 100.00 OO 1. $52.5 million II. $13.12 million III. $75.62 million IV. $62.5 million OV. $32.54 million Save An 4 50.00

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