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25. The debt-to-equity ratio of the Cl Corp. is 0.27. If its cost of equity is 8.75% and its pretax cost of debt is 3.5%,
25. The debt-to-equity ratio of the Cl Corp. is 0.27. If its cost of equity is 8.75% and its pretax cost of debt is 3.5%, what comes closest to the company's WACC? The tax rate is 30%. B. 7.4% C. 7.8% D. 8.2% 26. Which of the following attributes would most likely lead to firms having higher WACC, holding all else constant? i) ii) iii) iv) Good credit and lower interest charges Higher equity market risk premiumn Higher beta Lower leverage A. 11 and 111 B. , ii, and iv C. i, iii, iv D. All of the above Please answer the following Q27-Q28 based on the information provided for the firm XYZ: You are trying to estimate the value of the XYZ Inc. company, as of the end of 2018. The after-tax cashflow from assets (FCFF) for the year ending 2018 is $900,000. The estimated WACC is 8.5%. 27. What comes closest to the value of the firm XYZ at the end of 2018 if the cashflow from assets are not expected to grow in the future? A. 0.83 million B. 0.9 million C. 7.8 million D. 10.6 million 28. What comes closest to the current value of the firm XYZ if the cashflow from assets are expected to grow at a constant rate of2.5% in the future? A. 0.92 million B. 10.8 million C. 15.4 million D. 36 million
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