An Australian firm acquires a British firm that will generate cash flows of 20 000 pounds next year and these cash flows will grow at 4% a year. If the British weighted average cost of capital (WACC)is 9% and the spot exchange rate is $1.8/pound, what is the present value (PV)of the cash flows from this acquisition to domestic shareholders?

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The Answer of An Australian firm acquires a British firm that will generate cash flows of 20 000 pounds next year and these cash flows will grow at 4% a year. If the British weighted average cost of capital (WACC)is 9% and the spot exchange rate is $1.8/pound, what is the present value (PV)of the cash flows from this acquisition to domestic shareholders?

An Australian Firm Acquires a British Firm That Will Generate