Please answer fast i give you upvote. Azumah Corporation plans to finance a new investment with leverage. Azumah Corporation plans to borrow $53.7 million to financethe new investment. The firm will pay interest only on this loan each year, and it will maintain an outstanding balance of $53.7 millionon the loan. After making the investment, Azumah expects to earn free cash flows of $9.5 million each year. However, due to reducedsales and other financial distress costs, Azumah's expected free cash flows will decline to $8.5 million per year. Azumah currently has4.8 million shares outstanding, and it has no other assets or opportunities. Assume that the appropriate discount rate for Azumah'sfuture free cash flows is 8.4% and Azumah's corporate tax rate is 30%. What is Azumah's share price today given the financialdistress costs of leverage?The price per share is Sper share. (Round to the nearest cent.)

Outstanding balance on loan = $53,700,000Free cash flow= $9,500,000Expected Free cash flow=…

Azumah Corporation plans to finance a new investment with leverage. Azumah the new investment. The firm will pay interest only on this loan each year, and it on the loan. After making the investment, Azumah expects to earn free cash flor sales and other financial distress costs, Azumah's expected free cash flows will 4.8 million shares outstanding, and it has no other assets or opportunities. Assu future free cash flows is 8.4% and Azumah's corporate tax rate is 30%. What is distress costs of leverage? The price per share is $ per share. (Round to the nearest cent.)

Azumah Corporation plans to finance a new investment with leverage. Azumah the new investment. The firm will pay interest only on this loan each year, and it on the loan. After making the investment, Azumah expects to earn free cash flor sales and other financial distress costs, Azumah's expected free cash flows will 4.8 million shares outstanding, and it has no other assets or opportunities. Assu future free cash flows is 8.4% and Azumah's corporate tax rate is 30%. What is distress costs of leverage? The price per share is $ per share. (Round to the nearest cent.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 2P

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