Question: Please solve the following two questions on excel: Consider a firm with expected annual after tax cash flows of $180 million, and is expected to

 Please solve the following two questions on excel: Consider a firm
with expected annual after tax cash flows of $180 million, and is

Please solve the following two questions on excel: Consider a firm with expected annual after tax cash flows of $180 million, and is expected to grow at a constant rate of 4%. The market value of equity and debt are $850 millions and $570 millions respectively. The cost of equity and debt are 10% and 8.5% respectively. And tax rate on debt is 35%. a. Calculate the WACC of the firm considering the updated value of equity. (10 points) b. Value the firm using total cash flow and above calculated WACC. Then calculate the updated value for equity, derived from the total value of the firm. (10 points) c. Calculate the value of equity using the cash flow to equity holders, and show the equality of equity value from b and c. (10 points) Using the data given below, and the WACC=11.6%, calculate the Enterprise Value, Equity value, and value per share of the company assuming 10 million shares outstanding, a growth rate=6%, and RONIC=18% (25 points)

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 Accounting Questions!