Question: #Precisy the formulas you will use (DO NOT USE EXCEL) Problem 5 (7 points) The construction company CCG is fully equity financed. An institution financial

#Precisy the formulas you will use (DO NOT USE EXCEL)

Problem 5 (7 points) The construction company CCG is fully equity financed. An institution financial institution has just granted him a debt of $500,000 at the interest rate of 4%. The objective of this indebtedness is to buy back 25,000 outstanding shares (out of a total of 80,000 shares). a) Assuming no taxes, calculate the value of the CCG business after takeover of shares. (3 points) b) The company has a return on assets of 14%. In the absence of taxes, what will be the required rate of return on CCG's equity? (4 dots)

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