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if excel is used pls proved formulas Suppose company ABC will be worth either 180 M or 100 M depending on whether the economy is

if excel is used pls proved formulas
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Suppose company ABC will be worth either 180 M or 100 M depending on whether the economy is strong or weak in one year. Both states of the economy are equally likely. The current risk-free rate is 5% and the cost of equity if the company is 100% equity financed is 12%. Assume perfect world. a. What is the current value of ABC if it is all-equity financed? b. What is the (before-tax) cost of debt, td, if ABC borrows $80 M? Explain (be brief). c What is the (before tax) cost of debt if ABC borrows $ 99 M? Hint determine whether the debt is nsky or not. If "yes", recall how to estimate cost of risky debt. d What is the cost of equity if ABC borrows $ 99 M? If you have not completed part c) you may assume that a = 7% I e. What is weighted average cost of capital (twacc) if ABC borrows $ 99 M? Suppose company ABC will be worth either 180 M or 100 M depending on whether the economy is strong or weak in one year. Both states of the economy are equally likely. The current risk-free rate is 5% and the cost of equity if the company is 100% equity financed is 12%. Assume perfect world. a. What is the current value of ABC if it is all-equity financed? b. What is the (before-tax) cost of debt, td, if ABC borrows $80 M? Explain (be brief). c What is the (before tax) cost of debt if ABC borrows $ 99 M? Hint determine whether the debt is nsky or not. If "yes", recall how to estimate cost of risky debt. d What is the cost of equity if ABC borrows $ 99 M? If you have not completed part c) you may assume that a = 7% I e. What is weighted average cost of capital (twacc) if ABC borrows $ 99 M

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