Mergers and acquisition

5. (The Corporations Law prohibits a person or company from acquiring shares which would take the acquirer beyond the 20% shareholding threshold or increase an existing holding which is between 20% & 90% List three ways in which the Corporations Law allows an acquirer to acquire shares in spite of this general prohibition (permitted methods). (3 marks) (1) You are given the following information: D = Debt = E = Equity DE = Target debt-to-equity = 30% T = Corporate marginal tax rate = 30% Cost of Debt = 6.0% R = Risk free rate = 10-year U.S. treasury bond rate = 2.5% Rm = Return on a broad based stock index Rm - Re= Equity risk premium = 5.0% = Bi = Levered beta (from finance.yahoo.com) = 1.1 Calculate the WACC