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Determine: 1- the WACC based on company's current capitalization and comps values: Current Capitalization: Cash on hand 10,000 PP&E 30,000 total debt 20,000 total equity
Determine:
1- the WACC based on company's current capitalization and comps values:
Current Capitalization: | |
Cash on hand | 10,000 |
PP&E | 30,000 |
total debt | 20,000 |
total equity | 60,000 |
valuations assumptions: | |
Tax Rate | 30% |
perpetual growth rate | 2% |
EBITDA Exit multiple | 10.0x |
risk free rate | 55 |
equity risk premium | 4% |
interest rate | 6% |
COMPARABLE COMPANY BETA | ||||||
COMPANY | LEVERED BETA | DEBT | EQUITY | DEBT/EQUITY | TAX RATE | UNLEVERED BETA |
A | 1.27 | 550 | 1100 | 0.5 | 35% | 0.96 |
b | 1.31 | 500 | 900 | 0.56 | 30% | 0.94 |
C | 1.15 | 450 | 1200 | 0.38 | 29% | 0.91 |
D | 1.11 | 600 | 1000 | 0.6 | 33% | 0.79 |
E | 1.38 | 450 | 1400 | 0.32 | 30% | 1.13 |
MEDIAN | 1.27 | 0.9432 |
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