I need this homework done in excel I did the calculations already in word but now need to transfer it to excel showing the calculations in each step of the way attached is the work sheet with solutions done in word now needs to be put into excel format

FIN 516 WEEK 2 Homework - Naveen Mehta Problem 14-11 Based on Chapter 14: WACC and Modigiani & Miller Extension Models With Growth Assumptions Consider the entrepreneur described in Section 14.1 (and referenced in Tables 14.1- 14.3). Suppose she funds the project by borrowing $750 rather than $500. a. According to MM Proposition I, what is the value of the equity? What are its cash flows if the economy is strong? What are its cash flows if the economy is weak? b. What is the return of the equity in each case? What is its expected return? c. What is the risk premium of equity in each case? What is the sensitivity of the levered equity return to systematic risk? How does its sensitivity compare to that of unlevered equity? How does its risk premium compare to that of unlevered equity? d. What is the debt-equity ratio of the firm in this case? e. What is the firm's WACC in this case? Solution: a. E = 1000 - 750 = 250. CF = (1400, 900) - 500 (1.05) = (612.5, 112.5) b. Re = (145%, - 55%), E[Re] = 45%, Risk premium = 45% - 5% = 40% c. Return sensitivity = 145% - (-55%) = 200%. This sensitivity is 4x the sensitivity of unlevered equity (50%). Its risk premium is also 4x that of unlevered equity (40% vs. 10%). d. 750/ 250 = 3x e. 25%(45%)+75%(5%) = 15% FIN 516 WEEK 2 Homework - Naveen Mehta Problem 14-18 Based on Chapter 14: WACC and Modigliani & Miller Extension Models With Growth Assumptions In mid-2012, AOL Inc. had $100 million in debt, total equity capitalization of $3.1 billion, and an equity beta of 0.90 (as reported on Yahoo! Finance). Included in AOL's assets was $1.5 billion in cash and risk-free securities. Assume that the risk-free rate of interest is 3% and the market risk premium is 4%. a. What is AOL's enterprise value? b. What is the beta of AOL's business assets? c. What is AOL's WACC? Solution: a) EV=market capitalization+ debt+ preferred shared capital+ minority interest-cash equivalents =$3.1B+$100M-$1.5B =$1.5B b) Beta=B*(market rate- risk free rate) =.90*(3.1/3.2)= 9% c) WACC=(E/V)*Re+(D/V)*Rd* E=$3.1B D=$100M V=$3.2B Re=.063 Rd=.034 WACC=(3.1/3.2)*.063+(.1/3.2)*.034 = .9688+.0011 = .9699 or 96.99% FIN 516 WEEK 2 Homework - Naveen Mehta Problem 15-15 Based on Chapter 15: Debt and Taxes Acme Storage has a market capitalization of $100 million and debt outstanding of $40 million. Acme plans to maintain this same debt-equity ratio in the future. The firm pays an interest rate of 7.5% on its debt and has a corporate tax rate of 35%. a. If Acme's free cash flow is expected to be $7 million next year and is expected to grow at a rate of 3% per year, what is Acme's WACC? b. What is the value of Acme's interest tax shield? Solution: a. Value of Leveraged Firm = Value of Equity + Value of Debt = 100 + 40 = 140 Value of Levered Firm = Free Cash Flow/(WACC - Growth Rate) 140 = 7/(WACC - 3%) 140*WACC - 140*3% = 7 WACC = (7 + 4.2)/140 = .08 or 8% b. WACC before Tax = WACC + Debt/(Debt + Equity)*Cost of Debt*(Tax Rate) = 8% + 40/140*7.5%*35% = 8.75% Value of Unlevered Firm = Free Cash Flow/WACC Before Tax - Growth Rate = 7/(8.75% - 3%) = 122 million Present Value of Interest Tax Shield = Value of Levered Firm - Value of Unlevered Firm = 140 - 122 = 18 milllion