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The following information relates to Alpha Inc. Net profit margin-22% Sales in Year 0 15m Fixed capital investment in Year 0 = 4m Working capital
The following information relates to Alpha Inc. Net profit margin-22% Sales in Year 0 15m Fixed capital investment in Year 0 = 4m Working capital investment as a percentage of sales = 8.5% Tax rate 40% Interest expense on par value of debt of $20m in Year 0 = 11 5% WACC during the high growth phase = 19% WACC during the mature phase = 16% middot interest expense, and sales are expected to grow at a rate of 12% for the next 5 years and then stabilize at a long-term constant growth rate of 6%. Compute the value of the firm
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