Question
Exhibit 5 Financial Information for OldTown Berhad and the Malaysian Market as of December 2017 OldTown and Market Information OldTown Current Capital Structure Debt Information
Exhibit 5 Financial Information for OldTown Berhad and the Malaysian Market as of December 2017 OldTown and Market Information OldTown Current Capital Structure Debt Information Debt (book value, D) RM20 OTB Cost of Debt (KD, for new debt) 5.10% Equity (market value, E) RM1,125 = # Shares * Price Target (future) Capital Structure: # shares outstanding (m) 463 Target Debt Share (D/V) 10% Share price RM2.43 Target Equity Share (E/V) 90% Total Firm Value (V) RM1,145 V = D + E Current Debt Share (D/V) 2% Equity Information Current Equity Share (E/V) 98% OTB Equity Beta (levered, E ) 0.75 OTB Cost of Equity (KE ) 8.60% By the CAPM: KE = Rf + ( E * MRP) Note: Cost to OTB (KE ) = Expected Return to Investors (RE ) Malaysia Country Data Weighted Average Cost of Capital (WACC) Corporate Tax Rate (tax) 24.0% . Calculate the WACC
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