7:00 PM 9.0KB/s O M B .ill all 48 LN 9 Cos.. apital (1) X Easily add text in PDF Add INq : Cost of Capital cost of Debt (kd ) 2.9. 12% 5-yr Seri-annual band at 120. Toc= 307 N= 5 X 2=10 OYTM 2 PV=- 120 PMT = 6 (1 -03 ) FU=100 24.2 EPT (X) = 0- 0198 Annualized Rate : (170. 0198) - 1= 1%. 2 1/ "1" is unknown = kel = PMT (1-T ) - 124-0g my of Debt 120 = 18 ($ 1f M J of Debt is Unknown Kad= I CI-T) = 129,(1- 83* 8.41 Cost of aquiz Cke ) 2 methods : (D DAM Ke = Docit?) - 9 See Text or PAT _ CAPM Ke = Rf + B ( Rm - RX ). for referen WACC. (it. Average of kidd ke ) eq ABC WACK= 10% ( 0.4 ) + 20% Co.0) Debt to (ka= 10% ) = 16% Equity 60 ( ke = 20%) Application = Given any level of Cashflow ( FCP ) = Lower the WACK, higher the value eq. FCF = $ 100 if WACK- 10% Value =/ 1. = $1080