How much will a firm need in cash flow before tax and interest to satisfy debt holders and equity holders if: the tax rate is 40%, there is $10 million in common stock requiring a 12% return, and $6 million in bonds requiring an 8% return? (Use the values in dollar.)
A) $1,392,000
B) $1,488,000
C) $2,480,000
D) $2,800,000
Correct Answer:
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