Suppose Alcatel-Lucent has an equity cost of capital of 10.4 % , market capitalization of $ 10.80 billion, and an enterprise value of $ 15.0 billion with a debt cost of capital of 7.5 % and its marginal tax rate is 33%.

a. What is Alcatel-Lucent's WACC?

b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the following expected free cashflows?

c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)?

Suppose Alcatel-Lucent has an equity cost of capital of 10.4 %, market capitalization of $10.80 billion, and an enterpris is 33%. a. What is Alcatel-Lucent's WACC? b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the follov Year 1 2 3 FCF (S million) 68 97 -100 55 c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)? The debt capacity of the project in part (b) is as follows: (Round to two decimal places.) 0 Year 1 2 3 Debt capacity $ million million million million