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Business, 19.03.2021 01:50 gizmo50245

From the next year onwards, Colt Systems is estimated to have an EBIT of $15 million. It will also spend $6 million annually on total capital expenditures and increases in net working capital, and have $3 million in depreciation expenses. Colt is currently an all-equity firm with a corporate tax rate of 35% and a cost of capital of 10%. a) What is the market value of its equity today (assuming all cash flows are paid back to the equity holders at the end of each year)?

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From the next year onwards, Colt Systems is estimated to have an EBIT of $15 million. It will also s...
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