Receive for the plant for the divestiture to be profitable

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Reference no: EM131347637

Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $ 1.64 million per year, growing at a rate of 2.4% per year. Goodyear has an equity cost of capital of 8.7%, a debt cost of capital of 7.2%, a marginal corporate tax rate of 36%, and a? debt-equity ratio of 2.6. If the plant has average risk and Goodyear plans to maintain a constant debt-equity ratio, what after-tax amount must it receive for the plant for the divestiture to be? profitable? (Round to one decimal place.)

Reference no: EM131347637

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Receive for the plant for the divestiture to be profitable : Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $ 1.64 million per year, growing at a rate of 2.4% per year. what after-tax amount must it receive..

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