Question 5

Airi would need to estimate Rakuten's WACC pre- and post-leveraged Fep Assume the cost of debt with 5 years to maturity is 0.298%. l ). Prepare a market value balance sheet in Rakuten's leverage recapitalization using the template in Exhibit 8 (assume tax and no arbitrage pricing). 5. 6. In less than 100 words, discuss the implications of the leveraged recapitalization for the two group of existing shareholders:0 those who sell their shares back to the firm, Gi) those who hold on to their shares. 7. Airi believes that an EBIT/EPS analysis following the template in Exhibit 7 would provide insights regarding the effects of the leveraged recapitalization on expected EPS, taking into account projections of future EBIT 8. In less than 300 words, discuss two types of costs & two types of benefits (excluding tax shiel and EPS) that would potentially arise from the proposed leveraged recapitalization for Rakute Inc. Hint: In addition to the theories and concepts you learned in class, you will earn more marks by adding releva materials from other sources such as Factiva (accessed via UWA Onesearch), Google News, Google Scholar, Make sure you cite the source using the APA referencing shyle. For more information, https.//guides.library.uwa.edu.au/referencinguwa Airi would need to estimate Rakuten's WACC pre- and post-leveraged Fep Assume the cost of debt with 5 years to maturity is 0.298%. l ). Prepare a market value balance sheet in Rakuten's leverage recapitalization using the template in Exhibit 8 (assume tax and no arbitrage pricing). 5. 6. In less than 100 words, discuss the implications of the leveraged recapitalization for the two group of existing shareholders:0 those who sell their shares back to the firm, Gi) those who hold on to their shares. 7. Airi believes that an EBIT/EPS analysis following the template in Exhibit 7 would provide insights regarding the effects of the leveraged recapitalization on expected EPS, taking into account projections of future EBIT 8. In less than 300 words, discuss two types of costs & two types of benefits (excluding tax shiel and EPS) that would potentially arise from the proposed leveraged recapitalization for Rakute Inc. Hint: In addition to the theories and concepts you learned in class, you will earn more marks by adding releva materials from other sources such as Factiva (accessed via UWA Onesearch), Google News, Google Scholar, Make sure you cite the source using the APA referencing shyle. For more information, https.//guides.library.uwa.edu.au/referencinguwa