Question
Electrolux of Sweden. Kristian Thalen has just joined the corporate treasury group at Electrolux of Sweden, a multinational Swedish appliance maker. Electrolux is considering making
Electrolux of Sweden. Kristian Thalen has just joined the corporate treasury group at Electrolux of Sweden, a multinational Swedish appliance maker. Electrolux is considering making an offer for GEs appliance business and wants to revise its weighted average cost of capital for its analysis in its home currency, the Swedish kroner (SEK). Kristian has been assigned the task. Using the following assumptions, he goes step by step through the following questions.
| Component | Value |
| Swedish kroner government bond yield (10-year) | 4.30% |
| Electrolux credit risk premium | 1.20% |
| Swedish corporate income tax rate | 26.00% |
| Electrolux beta | 1.30 |
| Swedish equity market risk premium | 4.00% |
| Electrolux shares outstanding | 286,130,000 |
| Electrolux share price | SEK 182.00 |
| Electrolux debt outstanding | SEK 11,532,000,000 |
What is Electroluxs cost of debt, after-tax, in SEK?
What is Electroluxs cost of equity in SEK?
What is Electroluxs market capitalization?
What is Electroluxs total value of equity outstanding?
What proportion of Electrolux; s capital structure is debt?
What proportion of Electroluxs capital structure is equity?
What is Electroluxs weighted average cost of capital?
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Financial Ratio Analysis
Authors: Andrew P.C.
1st Edition
1973493381, 978-1973493389
