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Value the following project if the company DOES NOT rebalance to maintain a constant debt/value ratio. cost of project: 6,000 cost of capital with all
| Value the following project if the company DOES NOT rebalance to maintain a constant debt/value ratio. | |||||
| cost of project: | 6,000 | ||||
| cost of capital with all equity financing: | 11% | rU | |||
| Tax rate: | 21% | T | |||
| cost of debt: | 8% | rD | |||
| perpetual debt: | 2,500 | ||||
| Cash flows | CF | ||||
| 0 | -6,000 | ||||
| 1 through | 700.00 | ||||
| Calculate WACC and APV perpetuity | |||||
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Finance And Financial Markets
Authors: Keith Pilbeam
2nd Edition
1403948356, 978-1403948359
