Suppose the AllRight company has a pre-tax cash flow from assets of $1650, in perpetuity. The company has in its capital structure debt for $6,000, with a cost of 5% per year. The corporate tax rate is 20%. The risk-free rate is 5% and the market risk premium is 5%. The beta of equity with current debt is 1.5. rate the company by WACC (a, b and c) and by the APV method:

1. Calculate free cash flow from assets and free cash flow from shareholders
2. Calculate the Weighted Average Cost of Capital (WACC)
3. Calculate the value of assets using the WACC
4. Find (cost of capital of deleveraged assets):
5. Calculate V^u from
6. Calculate the value of the assets per APV and compare it with your answer in c)