What should the value of the equity be

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Reference no: EM132029536

1) Suppose you borrow $800000 when financing a coffee shop which is valued at $1958500. You expect to generate a cash flow of $2200000 at the end of the year. The cost of debt is 8%. What should the value of the equity be?

2) Suppose you borrow $800000 when financing a coffee shop which is valued at $1958500. You expect to generate a cash flow of $2200000 at the end of the year. The cost of debt is 8%. What is the cost of equity?

Reference no: EM132029536

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