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Business, 24.04.2020 20:08 gamblenyny

Fletcher Corporation is debating whether to convert its all-equity capital structure to one that is 2% debt. Currently, there are 1,933 shares outstanding selling at $69 per share. EBIT is expected to remain at $14,204 per year forever. The interest rate on new debt is 6%, and there are no taxes. You currently hold 100 shares of Fletcher. What is your annual cash flow under the current (i. e., all-equity) capital structure? Assume that Fletcher has a 100% dividend payout ratio.

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