Question: no excel answer. please show step by stepfor a-e thank you WACC calculations example: Desert Rose Cosmetics, Inc. (DRC) is a U.S. multinational company with

no excel answer. please show step by stepfor a-e thank you

no excel answer. please show step by stepfor a-e
WACC calculations example: Desert Rose Cosmetics, Inc. (DRC) is a U.S. multinational company with the following debt and equity components in its consolidated capital section. DRC evaluates all its business decisions using the U.S. currency. Common shares are only listed in NYSE. Assumptions Value Tax Rate 35.00% 10-year 6% Euro Bonds (euros) selling at par 65,000,000 20-year 8% Pound Bonds (pounds) selling at par $3,000,000 Spot Rate ($/E) $1.25/E Spot Rate ($/E) $1.65/f Number of common share outstanding 2,000,000 Stock price $20/share Stock beta 1.30 Risk-free rate 4% Market expected return 10% a. What is DRC's cost of equity (ke)? b. What is the market value of DRC's total debt outstanding in US$ (D)? c. What is DRC's overall pre-tax cost of debt (kd)? d. What is the weight of debt financing in US$ (D/V)? e. What is DRC's WACC

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!