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Suppose Alcatel-Lucent has an equity cost of capital of 10.4%, market capitalization of $10.80 billion, and an enterprise value of $15 billion. Suppose Alcatel-Lucent's debt

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Suppose Alcatel-Lucent has an equity cost of capital of 10.4%, market capitalization of $10.80 billion, and an enterprise value of $15 billion. Suppose Alcatel-Lucent's debt cost of capital is 7.1% and its marginal tax rate is 36% a. What is Alcatel-Lucent's WACC? b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the expected free cash flows as shown here, EEB? c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)? a. What is Alcatel-Lucent's WACC? Alcatel-Lucent's WACC is %. (Round to two decimal places.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Year FCF ($ million) 2 101 -100 45 65

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