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Vale Stoopro 50 Nuoro shares onding in millions To Assin 5 mins 5000 Tot Deen millions Book valueMarket value) 1500 Regression Bete 1.32 Market nok premium in 23 Pisk-free Rate 0.98 Income Statement for Environ Systems for the year ending December 2021 Revenue 2021 Gross sales 281, 263 (Less sales returns and allowances) (10.000 Net Sales 271,263 2020 196 884 (7000) 189,884 Cost of Goods Sold Cost of Goods Sold Gross Profit (Loss) 130,123 123,765 141,140 66,119 Expenses Advertising Depreciation Employee benefits Research and development Salaries and wages Other Total Operating Expenses Operating Income (Loss) Non-operating revenues, expenses, gains, losses (Less interest expense) Income Before Taves (Less income tax expense) Income From Continuing Operations 12 16.616 3,458 24.165 11,243 8,123 63.617 12 16,616 3,458 26,582 10,906 7,643 65,216 903 77,523 12,762 (6.113) 84,172 (1,069) 83,103 903 903 Below-the-Line Items Income from discontinued operations Extraordinary items Cumulative effect of accounting changes Net Income 83,103 903 States Environ Systems is a firm that specializes in clearing environmental damage (waste disposal) and Specialty chemicals. The firm has been trading for 5 years and gets all its revenue in the United As a junior analyst in a boutique investment firm with a long-term investment horizon, you have collected data about Environ (which is presented in the last page of this document) and have been subsequently asked to estimate certain inputs that are necessary to estimate a value for Erwiton. When necessary, assume a marginal tax rate of 21%. Question 1 (15 points): (a) (7 points) Calculate Environ's unlevered Beta and cost of equity. (6) (s points) You have initially estimated Environ's cost of debt to be 2%. However, you find out that the data collected did not take into account a recent bond issuance of $800 million which Environ took to expand its environmental clean-up business. Estimate what the appropriate WACC for Environ is after accounting for this, assuming that this bond issue commands an after-tax interest rate of 1.63% per annum. Vale Stoopro 50 Nuoro shares onding in millions To Assin 5 mins 5000 Tot Deen millions Book valueMarket value) 1500 Regression Bete 1.32 Market nok premium in 23 Pisk-free Rate 0.98 Income Statement for Environ Systems for the year ending December 2021 Revenue 2021 Gross sales 281, 263 (Less sales returns and allowances) (10.000 Net Sales 271,263 2020 196 884 (7000) 189,884 Cost of Goods Sold Cost of Goods Sold Gross Profit (Loss) 130,123 123,765 141,140 66,119 Expenses Advertising Depreciation Employee benefits Research and development Salaries and wages Other Total Operating Expenses Operating Income (Loss) Non-operating revenues, expenses, gains, losses (Less interest expense) Income Before Taves (Less income tax expense) Income From Continuing Operations 12 16.616 3,458 24.165 11,243 8,123 63.617 12 16,616 3,458 26,582 10,906 7,643 65,216 903 77,523 12,762 (6.113) 84,172 (1,069) 83,103 903 903 Below-the-Line Items Income from discontinued operations Extraordinary items Cumulative effect of accounting changes Net Income 83,103 903 States Environ Systems is a firm that specializes in clearing environmental damage (waste disposal) and Specialty chemicals. The firm has been trading for 5 years and gets all its revenue in the United As a junior analyst in a boutique investment firm with a long-term investment horizon, you have collected data about Environ (which is presented in the last page of this document) and have been subsequently asked to estimate certain inputs that are necessary to estimate a value for Erwiton. When necessary, assume a marginal tax rate of 21%. Question 1 (15 points): (a) (7 points) Calculate Environ's unlevered Beta and cost of equity. (6) (s points) You have initially estimated Environ's cost of debt to be 2%. However, you find out that the data collected did not take into account a recent bond issuance of $800 million which Environ took to expand its environmental clean-up business. Estimate what the appropriate WACC for Environ is after accounting for this, assuming that this bond issue commands an after-tax interest rate of 1.63% per annum

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