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Homework answers / question archive / WHU Ltd operates in a dividend imputation tax system where the corporate tax rate is 30%
WHU Ltd operates in a dividend imputation tax system where the corporate tax rate is 30%. WHU has identified a new project that will cost $100 million and which will produce an operating cash flow of $20 million for each year of its 10-year life. WHU has a constant target capital structure of 40% debt at a constant interest rate of 5% p.a. The required return on equity is 10%. What is the NPV of this project? Use a gamma of 0.25.
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