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What is the amount of the fcf to common equity holders

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Problem 1: Assume that XYZ, Inc. is a single asset firm that is expected to generate $5 million in net cash flows per year indefinitely. The firm's tax rate is 35%. After satisfying all mandatory obligations, all remaining FCF is distributed to common stockholders in the form of cash dividends. The appropriate cost of equity capital, to ABC, is 14%. What is the amount of the FCF to common equity holders each year?

Group of answer choices

A. $3,250,000
B. $23,214,286
C. $28,214,286
D. $33,214,286

Reference no: EM132797204

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