Question: Consider Alcatel-Lucents project in Problem 5. In Problem 5, Suppose Alcatel-Lucent has an equity cost of capital of 10%, market capitalization of $10.8 billion, and

Consider Alcatel-Lucent’s project in Problem 5.
In Problem 5, Suppose Alcatel-Lucent has an equity of 10%, market capitalization of $10.8 billion, and an enterprise value of $14.4 billion. Suppose Alcatel-Lucent’s debt is 6.1% and its marginal tax rate is 35%.
a. What is the to equity for this project?
b. What is its NPV computed using the FTE method? How does it compare with the NPV based on the WACC method?

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