Subject: accounting Phoenix Industries has twelve million shares outstanding, generates freecash flows of $75 million each year, and has a cost of capital of 12%. It alsohas $50 million of cash on hand. Phoenix wants to decide whether torepurchase stock or invest the cash in a project that generates free cashflows of $3 million each year. Should Phoenix invest or repurchase theshares?A) RepurchaseB) InvestC) Indifferent between optionsD) Cannot say for sure

To determine whether Phoenix Industries should repurchase stock or invest in the project, we need to…

Answered: Phoenix Industries has twelve million…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 8P

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