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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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