M&M CASE PROJECT

The final delivery should be an answer for M&M Pizza Company regarding the debt. Remember that we have two different environments without tax and with tax. Compare the Equity Company to the leverage company under the two tax environment.

When doing so provide for each of the four situations: MUST BE SHOWN IN EXCEL

a.equity value

b.company value

c.stock price

d.WACC

e.Cost of equity.

Hint: In your solution you can use M&M propositions and

r=cost of debt

t=tax rate

E=equity value

re=cost of equity