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Business, 03.12.2019 07:31 paaoolav

Aerelon airways, a commercial airline, suffers a major crash. as a result, passengers are
considered to be less likely to choose aerelon as their carrier, and it is expected free cash flows
will fall by $15million per year for five years. if aerelon has 55 million shares outstanding, an
equity cost of capital of 10%, and no debt, by how much would aerelonʹs shares be expected to
fall in price as a result of this accident?
a) $0.93
b) $1.03
c) $1.14
d) $1.34

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Answers: 2

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Aerelon airways, a commercial airline, suffers a major crash. as a result, passengers are
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