Use the in-class example below, change the cost of equity from 12% to 15%, compute the...

Transcribed Image Text:

Use the in-class example below, change the cost of equity from 12% to 15%, compute the NEW value of the firm's equity. Cost Face value Tax rate Weight Year 1 2 5 $2400 $2600 $3000 Equity 12.00% 54.78% FCFE $200.0 0 $300.0 0 $350.0 0 $400.0 0 $500.0 0 $3,000. 00 None of above Debt 10.00% $2,400. 00 21.00% 45.22% FCFD $189.6 0 $189.6 0 $189.6 $189.6 $189.6 $2,400. 00 Firm 10.15% FCFF $389.6 0 $489.6 $539.6 $589.6 $689.6 $5,400. 00 Use the in-class example below, change the cost of equity from 12% to 15%, compute the NEW value of the firm's equity. Cost Face value Tax rate Weight Year 1 2 5 $2400 $2600 $3000 Equity 12.00% 54.78% FCFE $200.0 0 $300.0 0 $350.0 0 $400.0 0 $500.0 0 $3,000. 00 None of above Debt 10.00% $2,400. 00 21.00% 45.22% FCFD $189.6 0 $189.6 0 $189.6 $189.6 $189.6 $2,400. 00 Firm 10.15% FCFF $389.6 0 $489.6 $539.6 $589.6 $689.6 $5,400. 00

Answer rating: 100% (QA)

Okay here are the steps Given Cost of equity is now 15 i... View the full answer