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What is divest

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Reference no: EM132627948

Problem 1: What is divest? In terms of abnormal earnings?

AEt=Xt - (re X BVt-1)

Problem 2: If xt is 25000, re=18%, and BVt-1=125000. What is AEt?

Problem 3: Assume the firm can divest 25000 of unproductive capital with Xt falling by only 2000. What is the new AEt?

Reference no: EM132627948

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