QuestionAssume that the company has a tax rate of 35%, calculate the effective(after-tax) cost of debt capital. 7. Calculate the company’s WACC using the market value of equity and debt (i.e., gross debt not net debt). 8. Calculate the company’s net debt by subtracting its excess cash (collected in step 2) from its debt. Recalculate the weights for the WACC using the market value of equity, net debt, and enterprise value (note: enterprise value is the total market value of a firm’s equity and debt, less the value of its cash and marketable securities). Recalculate the company’s WACC using the weights based on the net debt. How much does it change? 9. How confident are you of your estimates in steps 7 and 8? What implicit assumptions did you make during your data collection efforts? 10. Now using relative valuation, estimate the share price of the companies that you have chosen. Use the four multiples (i.e. EBITDA multiple, P/E ratio, P/S ratio and EBIT multiple). (Hint: You can follow the steps from the example uploaded to Quercus – See Session 8 to 9.) You will have 4 share price estimates per company. Based on what you calculated, what do you believe is the share price? Please briefly justify your conclusion.BusinessFinanceMGT 232
solved : QuestionAssume that the company has a tax rate of 35%, calcu
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assigned to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good gradesLET THE PROFESSIONALS WRITE YOUR PAPER!