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What is the PV of the firm FCFs

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Question - Reliable Corp. has expected FCFs of $40 million per year, which are expected to continue forever. The first cash flow will occur one year from today. The firm has committed to a maintain a constant debt-equity ratio for its capital structure. The firm's target D/E ratio is 0.6. The firm's asset cost of capital (ra) is 12%, and its cost of debt is 5%. The corporate tax rate is 50%. What is the PV of the firm's FCFs?

Reference no: EM133187824

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