What is Cost of Equity? WACC? EV? MV? Q#2 is just that you have to explain the steps for Q#1 do please make sure the answer is easy to understand and follow step by step! 
Remaining Time: 39 minutes, 52 seconds. Question Completion Status: QUESTION 1 15 points Madrigal Electromotive, a German conglomerate, wants to sell its American subsidiary. Los Pollos Hermanos (LPH), and has hired you to do a valuation analysis. LPH is expected to generate unlevered free cash flow of $10 million next year, and this is expected to grow at an annual rate of 4% in perpetuity. A comparable publicly-traded firm in the same industry - Chicken Wings (CW) - has an equity beta of 1.4, a debt beta of 0.2, and a debt- equity ratio of 0.5. Assume that CW has similar operating risk characteristics as LPH. LPH plans to maintain a constant debt-to-equity ratio of 0.25, and its debt beta is also 0.2. Assume a tax rate of 40%, a risk-free rate of 5%. and a market risk premium of 7%. What is LPH's cost of equity (express your answer as a percentage, rounded to two decimal places)? What is LPH's WACC (express your answer as a percentage, rounded to two decimal places)? What is LPH's enterprise value (in millions of dollars, rounded to two decimal places)? What is LPH's market value of equity (in millions of dollars, rounded to two decimal places)? O points QUESTION 2 Write down a brief description of the steps that you took to arrive at the answers above. You will not get complete credit unless you show me the intermediate steps. If your final answer is wrong. I will not be able to assign any partial credit unless you show me your work T T T Arial 3 (12pt) T. S . E . Click Save and Submit to save and submit. Click Save All Answers to save all answers SAVE ALL ANSWERS SAVE AND Remaining Time: 39 minutes, 52 seconds. Question Completion Status: QUESTION 1 15 points Madrigal Electromotive, a German conglomerate, wants to sell its American subsidiary. Los Pollos Hermanos (LPH), and has hired you to do a valuation analysis. LPH is expected to generate unlevered free cash flow of $10 million next year, and this is expected to grow at an annual rate of 4% in perpetuity. A comparable publicly-traded firm in the same industry - Chicken Wings (CW) - has an equity beta of 1.4, a debt beta of 0.2, and a debt- equity ratio of 0.5. Assume that CW has similar operating risk characteristics as LPH. LPH plans to maintain a constant debt-to-equity ratio of 0.25, and its debt beta is also 0.2. Assume a tax rate of 40%, a risk-free rate of 5%. and a market risk premium of 7%. What is LPH's cost of equity (express your answer as a percentage, rounded to two decimal places)? What is LPH's WACC (express your answer as a percentage, rounded to two decimal places)? What is LPH's enterprise value (in millions of dollars, rounded to two decimal places)? What is LPH's market value of equity (in millions of dollars, rounded to two decimal places)? O points QUESTION 2 Write down a brief description of the steps that you took to arrive at the answers above. You will not get complete credit unless you show me the intermediate steps. If your final answer is wrong. I will not be able to assign any partial credit unless you show me your work T T T Arial 3 (12pt) T. S . E . Click Save and Submit to save and submit. Click Save All Answers to save all answers SAVE ALL ANSWERS SAVE AND
