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Suppose Alcatel - Lucent has an equity cost of capital of 1 0 . 1 % , market capitalization of $ 9 . 3 6
Suppose AlcatelLucent has an equity cost of capital of market capitalization of $ billion and an enterprise value of $ billion. Suppose AlcatelLucent's debt cost of capital is and its marginal tax rate is
a What is AlcatelLucent's WACC?
b If AlcatelLucent maintains a constant debtequity ratio, what is the value of a project with average risk and the expected free cash flows as shown here
Year
FCF $ million
c If AlcatelLucent maintains its debtequity ratio, what is the debt capacity of the project in part b
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