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Memphic Memphic
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6 years ago
Wyatt Oil just reported that a major fire destroyed one of its oil production facilities in Colorado. While the facility was fully insured, the loss of oil production will decrease Wyatt's free cash flow by $120 million at the end of this year and by $80 million at the end of next year. Wyatt has 50 million shares outstanding and has a weighted average cost of capital of 9%. Assuming the value of Wyatt's debt is not affected by this event, the expected decrease in Wyatt's stock price is closest to:
A) $2.00
B) $3.55
C) $3.87
D) $4.00
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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pbrown223pbrown223
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6 years ago
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Memphic Author
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6 years ago
Just got PERFECT on my quiz
sadiewolf
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Yesterday
Thanks for your help!!
logbi
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2 hours ago
You make an excellent tutor!
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