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Company A has the following: Debt 5,435,000 Equity 6,750,000 Interest expense 1,365,265 Tax rate 21% Risk free rate 2% Beta 1.50 Market return 10.5% Expected
Company A has the following:
| Debt | 5,435,000 |
| Equity | 6,750,000 |
| Interest expense | 1,365,265 |
| Tax rate | 21% |
| Risk free rate | 2% |
| Beta | 1.50 |
| Market return | 10.5% |
| Expected growth | 6.5% |
| EBITDA year 0 | 50,000 |
| D&A year 0 | 4,000 |
| Working capital | 1,000 (- inflation (8.6%) yoy) |
| Capex | 4,000 (+inflation (8.6%) yoy) |
| Perpetual growth rate | 4% |
What is your cost of debt?
What is your cost of equity?
What is your WACC?
What is the terminal value for year 5?
What is the PV of the terminal value??
What is the final company valuation?
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Multinational Finance
Authors: Kirt Butler
2nd Edition
0324004508, 978-0324004502
