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XY Company has the following data for the currentyear:-------------------------------------------------Earning before interest and taxes (EBIT) = $40,000, Tax rate (T) 20%, Fair value of long term
XY Company has the following data for the currentyear:-------------------------------------------------Earning before interest and taxes (EBIT) = $40,000, Tax rate (T) 20%, Fair value of long term debt (D) $600,000, rd 8%, rs 10%, Number of outstanding share (n) 6,000, Stock price (P0) 12, Assume that: 1) the market value of share (S) is stable, 2) all earnings are paid as dividends, 3) the long term debt is perpetual. S=P0n= $? V = D + S = $? D/V = ? S/V = ?% WACC = ?%
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