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Assumption: The company has weight of debt WD = 60%, cost of debt RD = 14%,...

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Finance

Assumption: The company has weight of debt WD = 60%,cost of debt RD = 14%, for unleveraged firm:Bu =1; the company has Tax Rate=35%, risk-free rateRf = 5%, Market Return = 11%, free cash flowFCF0 = 250 million, growth rate g =3%. Use the followingformula for beta of leveraged company: B = Bu [1+ (1-T)× (Wd /Ws)], What is the WACC and what is thevalue of the firm?


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Assumption: The company has weight of debt WD = 60%,cost of debt RD = 14%, for unleveraged firm:Bu =1; the company has Tax Rate=35%, risk-free rateRf = 5%, Market Return = 11%, free cash flowFCF0 = 250 million, growth rate g =3%. Use the followingformula for beta of leveraged company: B = Bu [1+ (1-T)× (Wd /Ws)], What is the WACC and what is thevalue of the firm?Please show work

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