- 12. An all-equity fBrm market issue $15 000 omhas market value of $12,000 and ^ cost of current market value equity of 17.26% The firm is planning to dbt at 63 percent interest and use the proceeds to reparchase shares at '-u' Assuming a 20% corporate tax rate, what will bethe cost of equity after repurchase? A) 19.14% B) C) D) 1 8.86% 21.26% 17.76% 13. The value of a firm is maximized when the A) weighted average cost of capital is minimized. B) levered cost of capital is maximized. C) tax rate is zero. D) cost of equity is maximized E) debt-equity ratio is minimized ck of marketability 14. In business valuation, the value of private firms are typically discounted for a la A) True B) False The following table presents forecasted financial and other information for Havasham Industries: Projeesed ERIT Eamings after tax Free eash fhove 197 210 225 135 144 155 Havashams WACC Expected growth rate in FCF, afler 2014 Warranted MV tirm FCF in 2014 4 0% 19.4 18.7 Warranted P E in 2014 15. What is an appropriate estimate of Havasham's terminal value as of the end of 2014, using the perpetual-growth equation as your estimate? A) $161 million B) $1,963 million C) $3,833 million D) $5,357 million D+E Enterprise Value MV of equity + MV of long-term debt minus cash everaged equ ity Tunleveraged equity Tunleveraged equity-Tdebt) (1 Tc)