Question
Please answer ASAP... Exant. is a publicly-listed food and beverage company that has been operating for more than 20 years. It is currently considering to
Please answer ASAP...
Exant. is a publicly-listed food and beverage company that has been operating for more than 20 years. It is currently considering to open a new branch in South Jakarta, and as a business analyst, you are asked to conduct a feasibility study of this business plan. One of your main tasks is to calculate the weighted average cost of capital (WACC) that will be used for the capital budgeting analysis for this project, which has a similar level of risk with the overall company
Based on the available data, currently the risk-free rate is 4.0%, and the market risk premium is 12%. The companys beta is 1.1. The last closing price per share is IDR 7,500, and there is a total of 12,000,000 shares outstanding. The companys debt consists of bond that is quoted 110%, with a par value of IDR 100,000,000 and time to maturity of 12 years. The number of total bond outstanding is 500. The coupon rate is 10% p.a., and the coupon is paid semi-annually. Companys tax rate is 25%
Based on the information above:
a. Calculate the companys cost of equity b. Calculate the cost of debt c. Calculate the total market value of equity and debt d. Calculate the companys weighted average cost of capital.
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