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6. The following data refers to Company Y: - Beta = 1.4 - Required return on debt (yield to maturity on a long term bond)

6. The following data refers to Company Y:
- Beta = 1.4
- Required return on debt (yield to maturity on a long term bond) = 4.5%
- Tax rate = 21%
- 30-year government bond = 3.1%
- Market risk premium can be assumed to be 5%
Current Capitalization (Millions of USD)
Currency Million USD
Shares Price $ 18.0
Shares Outstanding 95.0
Market Capitalization 1,710.0
- Cash & Short Term Investments 59.0
+ Total Debt 883.0
+ Pref. Equity -
+ Total Minority Interest -
=Total Enterprise Value (TEV) 2,534.0
Book Value of Common Equity 457.0
+ Pref. Equity -
+ Total Minority Interest -
+ Total Debt 883.0
Total book capital 1,340.0
WACC =

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