#1

The firm has outstanding debt with a market value of 60 million. The firm's equity has a market value of 100 million. What is the firm worth?

#2

Let Timco use a capital structure that is 40% debt and 60% equity, The firm can borrow at 6%. The tax rate is 40%. Let the firm beta be 1.8, the market return 14%, and the risk free rate 2%. Find the WACC.

#3

Let Timco use a capital structure that is 40% debt and 60% equity, The firm can borrow at 6%. The tax rate is 40%. Timco is planning on paying dividend of 3 to maintain our 5% growth. The current stock price is 16.13. Find the WACC.