Question 1 (2+4+2+2 = 10 marks)

You are provided the following information of Notre Dame Corporation in New Zealand.

• The company has 1,000 million shares outstanding.
• The market value of its debt is $5.192 billion.
• The FCFF is currently $2.31 billion.
• The equity beta is 1.25; the equity risk premium is 6.5 percent; the risk-free rate is 5.25 percent.
• The before-tax cost of debt is 8.5 percent.
• The tax rate is 30 percent.
• To calculate WACC, he will assume the company is financed 25 percent with debt.
• The FCFF growth is 2.5 percent.

Using the given information, calculate the following:

1. WACC.
2. Value of the firm.
3. Total market value of equity.
4. Value per share.