You have the following information for the firm. You need to calculate Value of Operations...
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Finance
You have the following information for the firm. You need to calculate Value of Operations (firm value) after firm issues new debt.
Rf = 4%
RP= 6%
Bu = 1.2
Tax = 25%
FCF = 90
g=0%
First case when firm is 20% D and 80% E
Debt = 20%
Equity = 80%
rd = 4%
Second case when firm is 30% D and 70% E
Debt = 30%
Equity = 70%
rd = 5%
What is the difference between new Vop (30% debt and 70% equity) and old Vop (20% debt and 80% equity) ?
In other words Vop 30%debt, 70% equity - Vop 20%, 80equity = ?
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