Question: As a treasury analyst, you are trying to value a potential target company X Co. The capital structure ratio (DE) currently for X Co. is

As a treasury analyst, you are trying to value a potential target company X Co. The capital structure ratio (DE) currently for X Co. is 70%. The te analysis between X Co.'s stock returns and market returns returned a coefficient of 2.5 for the market returns. The corporate trate is 29%. The Indian government t-bill is 6%, and the market risk premium is 9%. The beta of debt is negligible. The FCFF projections are Rs. 250 million for Year 1, growing at 5% per annum from Year I to Year 3 (.e. 1-2.25). Beyond the FCFF will grow at a constant rate of 2% per annum till perpetuity. The existing debt outstanding is Rs. 2500 million (considered a perdere rating is B. The direct and indirect expected cost of bankruptcy is assumed to be 35% of the unlevered firm value. calculate the vale dhe Rs. million. [10] Bond rating Default rate B- 32.5% B 26.36% As a treasury analyst, you are trying to value a potential target company X Co. The capital structure ratio (DE) currently for X Co. is 70%. The te analysis between X Co.'s stock returns and market returns returned a coefficient of 2.5 for the market returns. The corporate trate is 29%. The Indian government t-bill is 6%, and the market risk premium is 9%. The beta of debt is negligible. The FCFF projections are Rs. 250 million for Year 1, growing at 5% per annum from Year I to Year 3 (.e. 1-2.25). Beyond the FCFF will grow at a constant rate of 2% per annum till perpetuity. The existing debt outstanding is Rs. 2500 million (considered a perdere rating is B. The direct and indirect expected cost of bankruptcy is assumed to be 35% of the unlevered firm value. calculate the vale dhe Rs. million. [10] Bond rating Default rate B- 32.5% B 26.36%
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