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BHP Billiton, An Australian company s stock, has a beta of 1 . 2 0 . The expected return on the market is 1 2
BHP Billiton, An Australian companys stock, has a beta of The expected return on the market is per cent, and Treasury bills are yielding per cent. Further, the company has a debt issue outstanding with years to maturity that is quoted at per cent of face value. The issue makes semiannual payments and has an embedded cost of per cent annually. It considers a debtequity ratio of and a per cent corporate tax rate. In this year, the company has an EBIT of $ million. Depreciation, the increase in net working capital, and capital spending were $ $ and $ respectively. You expect that over the next five years, EBIT will grow at per cent per year, depreciation and capital spending will grow at per cent per year, and NWC will grow at per cent per year. It also has $ million in debt and shares outstanding. After Year the adjusted cash flow from assets is expected to grow at per cent indefinitely.
What is the cost of equity
What is the posttax cost of debt
What is the WACC
What is the value of the company $
What is the price per share $
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