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Assume the firm expects no changes going forward to capital expense or depreciation charges, but they do expect to correct the imbalance in working capital
Assume the firm expects no changes going forward to capital expense or depreciation charges, but they do expect to correct the imbalance in working capital by a 1-time adjustment of earnings, in this upcoming year, to get the balance to be Zero (for working capital). If the cost of equity is 8% and the cost of debt (new debt) is 6% and the tax rate stays at 33%, and the expectation of sales growth is to remain constant at 2% indefinitely, then:
What is WACC?
What is the value per share of the firms common equity?
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