CASE STUDY : BUSINESS ASSESSMENT AND VALUATION FOR FORTESCUE METALS GROUP LIMITED

I already find out the calculation part for this Case study. Now I need explanation for that calculation like what can we decide now. So I need Company evaluation (Analysis the calculation and find out the outcome/decision based on that calculation)

Weighted Average Cost of Capital Cost of Debt USD Carrying Proportio Current Cost (%) Weighted Cost 2.53 Debt Type Value Senior Secured 3631.00 Senior Secure2152.00 Senior Usecured483.00 Finance Lease505.00 6771 0.54 Credit Notes Credit Liabilities 0.32 9.79 3.11 0.07 6.80 0.49 0.07 10.10 0.75 Average cost of debt 6.88 Before Tax Cost of Debt 0.563 * 4.715 + 0.3178 * 9.786 + 0.0713 * 6.804 + 0.0746 * 10.10 = 6.877 Corporate Tax Rate 30% = 0.30 Effective Tax Rate 496.903 1823.323 2725 = 27.25% After Tax Cost of Debt Corporate Tax Rate (6.8772 * (1-0.3)-4.814% Effective Tax Rate (6.8772x(1-0.2729) = 5.003% Perfect up to here Capacity Assess Pricing Model (CAPM) Risk Free Rate 10-year Australia Government Bond Yield 2.78496 0.02784 Market Risk Rate S&P/ASX 200 Accumulation Index (including dividend and franking credit components) average annual return five-year calendar period to July 10th 2017