Question No: 03 05 This is a subjective question, hence you have to write your answer in the Text Field given below As a treasury analyst , you are trying to value a potential target company X Co The capital structure ratio (DE) currently for X Co is 70%. The regression analysis between X Co s stock returns and market returns returned a coefficient of 25 for the market returns. The corporate tax rate is 25% The YTM of Indian government t-bill is 6% and the market risk premium is 99. The beta of debt is negligible The FCFF projections are Re 250 million for Year 1 growing at 5% per annum from Year 1 to Year 36 e 1-2, 2-3) Beyond three years. FCFF for X Co will grow at a constant rate of 2% per annum till perpetuity. The existing debt outstanding Rs 2500 million considered a perpetual debe). The bond rating 1 B. The direct and indirect expected cost of ankruptcy is assumed to be 35% of the unlevered firm value ealeulate the value of the levered firm in Rs million [10] Bondati Default rate B 3239 B 263646 Question No: 03 05 This is a subjective question, hence you have to write your answer in the Text Field given below As a treasury analyst , you are trying to value a potential target company X Co The capital structure ratio (DE) currently for X Co is 70%. The regression analysis between X Co s stock returns and market returns returned a coefficient of 25 for the market returns. The corporate tax rate is 25% The YTM of Indian government t-bill is 6% and the market risk premium is 99. The beta of debt is negligible The FCFF projections are Re 250 million for Year 1 growing at 5% per annum from Year 1 to Year 36 e 1-2, 2-3) Beyond three years. FCFF for X Co will grow at a constant rate of 2% per annum till perpetuity. The existing debt outstanding Rs 2500 million considered a perpetual debe). The bond rating 1 B. The direct and indirect expected cost of ankruptcy is assumed to be 35% of the unlevered firm value ealeulate the value of the levered firm in Rs million [10] Bondati Default rate B 3239 B 263646