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QUESTION .( Finance management BUACC3701) Nodebt ltd has a capital structure of 100% ordinary equity with current return on equity of 18%.its earning before interest

QUESTION .( Finance management BUACC3701)

Nodebt ltd has a capital structure of 100% ordinary equity with current return on equity of 18%.its earning before interest and taxation was $142857.Nodebt pay tax at the rate 30%.

1.What is the current market value of Nodebt?

2.What is the weight average Cost of Capital?

3.What is the market value of Nodebt ltd after it issue the debt?

4.What is the market value of Nodebt ltd equity after it issue the debt?

5.What is the cost equity(ke) after it issue the debt?

6.What is the new Weight Average Cost of Capital?

7.Explain what has happened to WACC and why?

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