Assumption: The company has weight of debt WD = 60%, cost of debt RD = 14%,...

Assumption: The company has weight of debt W_D = 60%, cost of debt R_D = 14%, for unleveraged firm: B_u =1; the company has Tax Rate=35%, risk-free rate R_f = 5%, Market Return = 11%, free cash flow FCF₀ = 250 million, growth rate g =3%. Use the following formula for beta of leveraged company: B = B_u [1+ (1-T) × (W_d /W_s)], What is the WACC and what is the value of the firm?

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jeff jeffy answered 7 months ago

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