RiverRocks (whose WACC is 12.7%) is considering an acquisition of Raft Adventures (whose WACC is 14.8%). The purchase will cost $100.2 million and will generate cash flows that start at $15.9 million in one year and then grow at 4.5% per year forever. What is the NPV of the acquisition?
RiverRocks (whose WACC is 12.7%) is considering an acquisition of Raft Adventures (whose WACC is 14.8%). The purchase will cost $100.2 million and will generate cash flows that start at $15.9 million in one year and then grow at 4.5% per year forever. What is the NPV of the acquisition?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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10. RiverRocks (whose WACC is 12.7%) is considering an acquisition of Raft Adventures (whose WACC is 14.8%). The purchase will cost $100.2 million and will generate cash flows that start at $15.9 million in one year and then grow at 4.5% per year forever. What is the NPV of the acquisition?
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