Question: Urgent Help, time limited Urgent Help, time limited Triangle Ltd is an ASX listed company which aims to acquire 100% shares of an unlisted firm,
Urgent Help, time limited
Urgent Help, time limited
Triangle Ltd is an ASX listed company which aims to acquire 100% shares of an unlisted firm, Square Ltd, both of which operate in the same industry. Triangle capital structure comprises of 50% Debt and 50% equity with beta debt of 1.34. To finance acquiring Square, Triangle is facilitated to borrow up to 35% of funds needed with no material effect on its credit rating. a) If risk free rate is 4.3% and return on market is 9.3%, calculate Triangle cost of equity using CAPM. b) How much is Triangle WACC if tax rate is 30% and cost of debt is 7.5% ? Triangle Ltd is an ASX listed company which aims to acquire 100% shares of an unlisted firm, Square Ltd, both of which operate in the same industry. Triangle capital structure comprises of 50% Debt and 50% equity with beta debt of 1.34. To finance acquiring Square, Triangle is facilitated to borrow up to 35% of funds needed with no material effect on its credit rating. a) If risk free rate is 4.3% and return on market is 9.3%, calculate Triangle cost of equity using CAPM. b) How much is Triangle WACC if tax rate is 30% and cost of debt is 7.5% ? c) Calculate WACC of Square. d) Explain in detail what would happen if Triangle evaluated the purchase of Square using WACC of Triangle
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