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please answer all of 14.1 a,b. 14.2 a,b. 14.4 a,b. please show work, will give good rating. thanks. 14.4 Find L'Occitane's WACC under each of
please answer all of 14.1 a,b. 14.2 a,b. 14.4 a,b. please show work, will give good rating. thanks.
14.4 Find L'Occitane's WACC under each of the following scenarios. a. L'Occitane has a market value debt-to-value ratio of 40 percent. L'Occitane's pretax borrowing cost on new long-term debt in France is 7 percent. L'Occitane's beta relative to the French stock market is 1.4. The risk-free rate in France is 5 percent and the market risk premium over the risk-free rate is 6 percent. Interest is deductible in France at the marginal corporate income tax rate of 33 percent. What is L'Occitane's WACC in the French market? b. L'Occitane can borrow in the Europound market at a pretax cost of 6 percent. International investors will tolerate a 50 percent debt-to-value mix. With a 50 percent debt-to-value ratio, the beta of L'Occitane is 1.2 against the MSCI world index. The required return on the world market portfolio is 12 percent. What is L'Occitane's WACC under these circumstancesStep by Step Solution
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