A firm has free cash flow of 3,500,000 USD. When the firm was unlevered it had a cost of equity of 9%. Then it went for

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answerhappygod
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A firm has free cash flow of 3,500,000 USD. When the firm was unlevered it had a cost of equity of 9%. Then it went for

Post by answerhappygod »

A firm has free cash flow of 3,500,000 USD. When the firm was
unlevered it had a cost of equity of 9%. Then it went for permanent
leverage by borrowing 500,000 USD at 8% interest rate. Corporate
tax rate 40%. What is the WACC of the company? If FCF increase to 4
million next year, what will be the value of the company?
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